Many people are uncertain if trusts are a necessary part of their estate planning portfolio. The answer is a resounding ‘yes’ because they offer advantages that cannot be obtained simply by executing a last will and testament.
Trusts are a vital factor in protecting personal possessions, financial investments, and business assets throughout your life and upon death. They are suitable for nearly everybody, but are of particular importance to business owners and people responsible for the care of minor children.
One of the primary reasons for arranging trusts is avoid probate; the legal process used to settle decedent estates. Most often, the process extends for many months and prohibits heirs from receiving inheritance gifts in a timely fashion.
When probate extends for long periods the assets often depreciate in value. Furthermore, estate property might have to be sold to cover expenses related to the settlement process.
Probated Wills are vulnerable to legal litigation; especially if relatives’ dispute over inheritance property. Estate settlement can be extended for years whenever legal litigation occurs. The process can end up being so expensive that estate executors have to sell assets to cover associated costs.
The simplest way to avoid these types of problems is to transfer ownership of property and assets into a trust. Not only is property keep out of probate, assets can be distributed to heirs within a short time. Furthermore, strategies can be established to minimize inheritance and estate tax obligations.
Since trusts are used to protect everything a person owns it is advisable to consult with estate planning sun city az. Major problems can occur if trusts aren’t funded properly or if documents aren’t in order. Those who choose to go it alone ought to at least have lawyers review their estate plan to make certain it is legally-binding.
Another benefit of talking with lawyers is they can advise of the various types of trusts, along with the pros and cons of each. A few of the most widely used are living, revocable, children’s and family trusts. Each calls for a Trustor, Trustee, and beneficiary.
• Trustor refers to the person who sets up the trust.
• Trustees are responsible for overseeing the trust. There will be a primary and a successor. Primary Trustees are usually the Trustor; as they retain control of assets until death. Successor Trustees are responsible for setting the estate upon death.
• Beneficiaries are the individuals or organizations that receive inheritance gifts.
Trusts are classified as either living or testamentary. Living trusts are set up while the person is still living. All property placed inside living trusts is exempt from probate because it is owned by the trust and not the decedent.
Testamentary trusts are arranged after a person dies. Directives are outlined in the last will and testament. The Will is filed with the local probate court and the estate goes through the settlement process.
Lastly, trusts can be revocable or irrevocable. Trustors can modify revocable trusts when changes are needed. Irrevocable trusts cannot be modified unless permission is granted by the court.
Trusts are the best approach to keep assets out of probate and expedite settlement proceedings. Talk to an estate planning law firm to find out which estate planning methods are most suitable and offer the highest level of protection.