Trusts are a potentially valuable part of estate plan to consider and to understand. For that reason, estate planners should be familiar with the benefits of including a trust in their estate and what they do.
Advantages of a trust
There are a variety of different potential advantages of a trust to be aware of including:
- Placing conditions on how and when the estate planner’s assets are distributed;
- Reducing estate and gift taxes;
- Distributing assets to beneficiaries efficiently without the cost, delay and publicity of the probate court. Probate can cost between 5% to 7% of the estate planner’s estate and may be costly and time consuming;
- Better protecting the estate planner’s assets from creditors and lawsuits; and
- Naming a successor trustee who will manage the trust after the estate planner passes and is also empowered to manage the trust assets if the estate planner becomes unable to do so.
Choose from various types of trusts
Additionally, there are a variety of different types of trusts that can help the estate planner achieve different goals and that can serve different purposes on their own or as part of an estate plan. A trust can be used alongside a will as part of an estate plan or may be used on its own in place of a will.
It is important for estate planners to understand the range of options so they can decide what they feel comfortable with for their estate plan. Effective estate planning provides protection and peace of mind which is why knowledge of the advantages of having a trust is beneficial information to have.