When most people think of getting an estate plan, they usually think of getting a will. Although a will is a great way to give instructions to your family about how you want things to be done, it is not always the ideal way to handle your finances, property, and assets. Instead, the best way to protect your wealth is by using trusts. When you meet with an estate-planning attorney they will most likely encourage you to put everything that you have into a trust. Here are some reasons why trusts are superior when protecting your wealth.
1. Trusts Allow You To Maintain More Control
One of the biggest reasons to use a trust is that it allows you to have more control over your wealth. Within your trust, you can place instructions and stipulations that must be met in order for your loved ones to get their money. For example, if you create a trust for a child, you can determine how much money they get paid out each year rather than having them inherit one lump sum all at once. In addition, you can require that the person takes a drug test, gets a certain GPA, or meets a myriad of others conditions before inheriting.
2. Trusts Are More Private And Can Distribute Your Money Faster
Wills have to go through a process called probate. This is where the courts overlook the distribution and put everything in the will on public record. Most people want to avoid probate for two reasons. The first is that they don't want everything that they have, all of their wealth, instructions to their family, and so forth, on public record. Second, they don't want to have to go through the probate process because it takes so much time. Probate can delay your family getting what they need.
When you put your wealth in a trust, you ensure that your estate can start distributing right after your death so that your family can get what they need more quickly.
3. Trusts Better Protect Your Assets From Lawsuits And Taxes
Lastly, trusts have additional benefits such as assets protection and protection from taxes that can keep your money safer. For instance, in many cases, trusts are protected from lawsuits. If your child is sued, his or her trust would still be safe. This will ensure that your heirs are protected.
These are just a few reasons that people choose to use a trust in their estate plan. For more information, consider contacting a professional like Donald B Linsky & Associate PA.