Even if you have a will, almost all estate assets are subject to legal proceedings before they are distributed. Long legal battles can quickly complicate financial matters. If you would like to ensure your estate is fairly and accurately distributed, a trust could be right for you.
What is a trust?
Trusts are arrangements between you, an institution in Texas, an executor and/or your beneficiary concerning your assets. In the event of your death, a trust details how you would like your assets distributed.
Many people choose trusts for their degree of privacy and control. Trusts are usually handled outside of public probate court, unlike wills.
Trusts are generally more specific than wills about how to distribute assets and when. They can help outline financial goals that a will cannot encompass. Trusts can do the following:
- Help an estate avoid unnecessary tax.
- Hold assets for minors until they are legal adults or meet specific requirements (i.e. pursuing a higher education).
- Distribute assets to a charity using existing accounts.
- Help assets avoid probate and therefore lose value.
- Help assets avoid undesired redistribution by a judge.
Are there drawbacks to creating a trust?
A simple, elegant trust can be complicated to create. This requires more specific legal knowledge and wisdom than a will requires.
As a result, creating a trust is generally more expensive than creating a will. However, spending money now can help to preserve your assets later. If you take the time to consider what you want in a trust, you can help to save on planning costs.
A trust is an agreement you create to outlive you. As a result, it needs to be as extensive as possible to reflect your wishes now and for the future. These powerful documents are a good idea if you have with assets or loved ones you would like to financially protect after you're gone.