What are your options to protect your estate after you pass away? Many people draft wills and name executors to manage the administration of their estate. With the help of a will (and, likely, the probate process), a deceased person’s assets are distributed to family members and friends. However, there may be issues with just having a will, including potentially contentious probate, estate taxes and disputes.
To more effectively protect your legacy, you may want to consider including a trust in your estate plan. A trust allows you to distribute assets directly to beneficiaries without probate, which can also avoid estate taxes and disputes. You can also make a trust to control how your assets are distributed. By doing this, you can help protect trust funds from being misused.
What do you want a trust to do?
Have you considered what your family and friends will do with your estate after you pass away? With a trust, you can continue managing your estate to continue your legacy. There are a few types of trusts that you should consider drafting, including:
- Revocable trust: This type of trust can be altered or revoked at any time, allowing you to increase the value of trust funds or remove beneficiaries.
- Incentive trust: This type of trust allows you to decide when beneficiaries are allowed to use trust funds. For example, you could provide funds to a beneficiary who is actively taking college classes.
- Generation-skipping trust: This trust allows you to protect assets for your grandchildren or great-grandchildren.
- Charitable trust: You can use this trust to distribute funds to charities, private organizations or research groups.
- Spendthrift trust: This trust can be used to limit how much funds a beneficiary can use, preserving the value of the trust.
Seeking professional legal guidance can help you draft a trust and organize your estate in ways that facilitate your goals and consider your unique needs and preferences.