When it comes to estate planning purposes, you can use either a will or a trust to determine how your assets are dispersed after your death. Which one you choose will depend on your personal financial situation, but many people decide to have a lawyer create a trust for several different reasons. Some of the main advantages of a trust include:
When a person has a will, his or her estate will need to go through probate. This involves court proceedings that ensure that assets are distributed according to a person's wishes. The downside to probate is the fact that the process can be very drawn out and tedious, and it can take a while for heirs to be able to legally take possession of what has been willed to them—in fact, it is possible for an estate to take months or even years to go through probate.
One of the biggest reasons that a person chooses a trust over a will is the fact that a trust is not required to go through probate, so settling an estate is much quicker. Since there are no court proceedings that become public record, trusts also allow a person to keep information about their assets private. Instead of months or years, an estate with a trust in place may be able to be settled in just weeks.
Choose How to Allocate Your Assets
Having a trust gives you greater control when allocating your assets to your heirs. This can be especially important when it comes to monetary assets. If a person has a will, his or her money will be distributed to heirs in a lump sum after the estate goes through probate. But with a trust, you are able to put conditions on how your money is distributed. For example, you may choose to have a child receive a portion of his or her inheritance at a certain age, and then set amounts at specific times. Many parents like to have this option to ensure that a child does not receive a large sum of money as a young adult that he or she will not know how to manage responsibly.
The way that a trust is set up can reduce any estate taxes that your estate will be responsible for paying and can also help increase the inheritance that your heirs receive by reducing any applicable gift taxes. The tax benefits of a trust can vary according to one's financial situation—speak with a trust lawyer to find out if a trust is the best choice for you. For more information, check out websites like http://wrightlawidaho.com/.