Trusts are common estate planning tools used by people of all backgrounds with various asset profiles. Anyone can benefit from the extra control that a trust grants over one’s own estate, even those who already have a will in place.
Creating a trust to complement your will is a strong estate planning tactic due to the unique benefits each document brings to the table. Knowing more about how different types of people can benefit from having a trust can inform your decision of how best to proceed with building an estate plan.
Business owners
A trust ensures a seamless transition of ownership over your business to your chosen beneficiary upon your death or incapacitation. Without a trust in place, your business and its employees might suffer during the turbulent period of determining ownership succession.
Parents
You can use a will to name a guardian for any underage children you might have, but immediately transferring all of your assets to your kids is not always the best course of action. You can instead use a trust to stipulate when and under what conditions your children will receive the assets you leave behind.
Anyone wishing to avoid probate
Perhaps the most immediately apparent benefit of using a trust is to avoid probate. Your will must go through the probate process to verify its validity before the court will distribute the inheritance to your beneficiaries, but this can entail significant time and monetary investment. While not all types of assets may go into a trust, those that do can transfer immediately and without disruption.
There is a misconception that trusts only benefit particularly wealthy individuals. The truth of the matter, however, is that anyone can use a trust to build a complete and comprehensive estate plan.
