5 Reasons To Have A Trust

5 Reasons To Have A Trust

After our recent post on trusts vs. wills, we received questions for further breakdowns on each of these estate planning components.  In today’s post we will discuss the top 5 Reasons to Have a Trust.

We hope reviewing these top reasons to have a trust, will help you decide if a trust is right for you.

Avoiding Probate

As discussed in our trusts vs. wills blog, unlike wills, trusts have the ability to avoid probate court. This means, if you fund your trust during your lifetime, your beneficiaries will not have to go through the judicial system that oversees wills, conservatorships, and guardianships, to authenticate your wishes. This saves your family undue hardship, as well as time and money.

Incapacity Planning

In the event you are suddenly incapacitated, having a trust in place will enable your trustee to access assets on your behave. Without an appointed trustee in place, your family could have to go to court to appoint a conservator. This individual could end up being a person you would not want handling your finances. The best way to ensure you have a trusted person in place, is to appoint them yourself.

Protecting Beneficiaries – minors

This perk can be two fold. In the event you have minor children. Setting up a trust can limit access to their inheritance, until they are old enough to manage their inheritance on their own. This is done by appointing a trustee, who must carry out the wishes you set for your minor child to acquire their inheritance.

Protecting Beneficiaries – adults

For adult beneficiaries having a trust can protect them from making unwise financial decisions. This can include having a specific amount set aside for a spouse, and another sum specifically for minor children. As well as, limiting the accessible funds to a single individual.

Creditor Protection

Properly constructed trusts can protect your assets from a beneficiary’s creditors. This is also true for family members in professions more prone to lawsuits. As assets within the trust would be out of reach of their creditors.