Most people initially choose to execute a Last Will and Testament to ensure that their estate assets are distributed according to their wishes after they are gone. While a Will certainly does allow you to decide how your estate assets are distributed after your death, a Will is also a relatively simple estate planning tool that offers limited benefits. For that reason, many people choose to use a trust as their primary method of distribution for assets within their estate plan. The Coral Gables trust attorneys at Stivers Law discuss why you might want to use a trust to distribute your estate assets.
Benefits of Using a Trust to Distribute Assets
Your Will may remain the foundation of your estate plan; however, there are several important benefits to establishing a trust to distribute the majority (or all) of your estate assets, including:
- Probate avoidance. Probate is the legal process that is required following the death of an individual. Probating even a relatively small and uncomplicated estate typically takes months. For a larger estate with complex assets, probate can be costly, both in terms of time and money. Moreover, all assets that are required to go through probate are inaccessible to the intended beneficiaries until the end of the probate process. For all these reasons, probate avoidance is a common estate planning goal, and a living trust is a common tool used to reach that goal. Assets held in a trust are considered “non-probate” assets and bypass the probate process altogether, meaning they can be distributed at any time according to the terms of the trust.
- Incapacity protection. The possibility of incapacity should always be considered within your estate plan. A tragic accident or debilitating illness could result in your incapacity at any time. A Will, however, cannot help you plan for incapacity because the terms of a Will only apply after the death of the Testator. A living trust, on the other hand, can be used very effectively as an incapacity planning tool by allowing you to appoint yourself as the Trustee and someone you wish to take over control of your assets as your Successor Trustee.
- Control over assets. Once a gift is made from your Will, the beneficiary of that gift may do with the gift as he/she wishes. In addition, gifts made using your Will cannot be made in small distributions. If the intended beneficiary is young, known to be a spendthrift, has an addiction problem, or the inheritance it just too large to hand someone all at once, a trust offers an excellent alternative to a Will. The terms of a trust, created by you, can distribute assets in small sums instead of one large lump sum. Those terms can also be used to dictate what the funds can be used for by the beneficiary along with ensuring that a Trustee (appointed by you) will manage and invest the assets held in the trust.
- Parents of minor children. If you are the parent of a minor child, you undoubtedly want your assets to be used to provide for your child if something happens to you. Your minor child, however, cannot legally inherit directly from your estate. A living trust can be used to protect your child’s inheritance until such time as your child is old enough to begin receiving that inheritance directly.
- Privacy. If you do not want the details regarding the distribution of your estate assets to be available to others, you may wish to use a trust to distribute those assets because your Will becomes public information the minute it is submitted to the court for probate. The terms of a trust agreement, on the other hand, remains private because it does not go through probate.
Contact Coral Gables Trust Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about incorporating a trust into your estate plan, contact the experienced Coral Gables trust attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.