Are you reviewing your estate planning needs? Do you already have a will? Even if you have a will, there are several reasons why you may need other estate planning documents, including a trust. A trust is a special estate planning document that gives specific instructions on how your assets should be passed along to your heirs. There are a variety of different types of trusts, but one of the most common is a living trust. An estate planning attorney can help you decide which type is best for you. Here are three reasons why you might need a trust as part of your estate plan:
To avoid probate. When you pass away, many of your assets will have to go through the probate process before they're distributed to your heirs. In some cases, probate can take months. During probate, the court makes sure all debts and taxes are paid and makes your passing public record so all possible heirs can make a claim on your estate. In addition to the delay of asset distribution, probate can also generate a substantial amount in legal fees and court costs.
However, assets that have beneficiary designations often bypass probate altogether. These include assets that are held in a trust. If you have a trust, your executor may be able to distribute assets to your heirs quickly and without any additional expense.
To control how assets are distributed. Are you worried about how your children or grandchildren may use your assets? If you want to make sure that they use the money for a specific purpose or want to prevent them from spending it quickly, you may want to use a trust to govern how assets are distributed. The trust can state that they only get assets when they reach specific ages or can state that the money can only be used for certain purposes. That can prevent your heirs from wasting your money and make sure it's used for a good purpose.
To keep money in the family. Are you part of a blended family? If so, you may want to make sure that a certain portion of your estate is maintained for your biological children. If you and your spouse have children from separate marriages, you might be concerned that your spouse could remarry or cut your biological children out of the estate after your passing. By using a trust, you can protect a portion of your estate as assets earmarked specifically for your kids.
For more information, contact an estate planning attorney. He or she can help you establish the documents that are right for your needs and goals.