Estate planning is a challenging undertaking for some people, partially because they may not fully understand the options that are available for passing their assets down to their loved ones. While some people opt to do this in their will, they may also choose to use a trust.
Trusts are often beneficial components of estate plans because they provide more structure than using a will. Some trusts are irrevocable, which means the terms can’t be changed unless you can get permission from all named beneficiaries or the court with jurisdiction over the trust.
If you’re considering irrevocable trusts, it’s critical that you understand how they work and the benefits of them.
Control of the trust
Once you establish and fund the trust, the control over the trust’s assets transitions to the trustee instead of the creator. Because you don’t have control over assets, creditors can’t claim what’s being held by the trust. The value of the contents of the trust is removed from the estate, so this can help to minimize taxes, which is particularly beneficial for high-value estates. This can assist with wealth preservation, so it can be passed down to future generations.
Privacy and ease
Trusts bypass the probate process, so the terms of the trust aren’t made public. This provides your beneficiaries with privacy, and bypassing probate can also ensure that they get their inheritance as quickly as possible.
It’s critical to set your estate plan up in a way that accurately reflects your wishes. Working with someone familiar with these matters may be beneficial, so you can ensure that the terms of the plan are all legally enforceable.
