What Are the Benefits of Having a Trust?

Few legal tools are as versatile as the trust in protecting your assets against death and an uncertain future. Unlike a will, which only becomes effective after the will's creator passes away, a trust goes into effect immediately.

Depending on your needs, trusts can provide asset protection and other benefits both during your lifetime and after your death.

Benefits of Having a Trust

Having a trust comes with a range of advantages for you and your family. Some of the most notable benefits include:

Avoid Probate

When you die, your estate passes through probate, the public and court-supervised process of wrapping up your financial and other affairs. Probate can be long and costly, and private information about your affairs can be made public. However, assets owned by a trust do not pass through probate, saving time and protecting your privacy.

Manage Assets During Incapacity

Trusts are not just for managing property once you are deceased. If you become ill, injured, or unable to care for yourself, a trust can ensure there are people you trust to manage your affairs.

Your regular and unexpected bills can continue to be paid, and you can continue to benefit from your financial assets, all under the trustee's supervision.

Protect Assets From Creditors

Because a trust is a separate legal entity, its assets are typically immune from being seized by creditors and used to satisfy personal obligations. This feature can help you maintain your possessions and assets even when you are going through personal financial difficulties.

Control Distribution of Assets

Trusts are an ideal solution for determining when certain loved ones can receive an inheritance or other property. With a trust, you could require that your children not receive their inheritance all at once or that they do not receive any property until they graduate college, for example.

Protect Assets for Minor Beneficiaries

Parents of minor children will appreciate that trusts put their children’s inheritance under the supervision of a trustee they choose. The trustee is responsible for managing the assets and inheritance until the child reaches the age of majority, typically 18, or is otherwise eligible to receive their distribution of the assets.

Absent a trust, the court would need to get involved in managing the distribution of assets to your minor children. This process does not move quickly and may not necessarily align with your goals or desires for your children. Instead, a court would make its determination as to what is best for your children.

Tax Advantages

Your assets in a trust can provide tax advantages for your loved ones following your passing. If your estate is particularly valuable, having a trust own your assets can reduce or eliminate any estate taxes you would otherwise be subject to. This could potentially save you and your family thousands of dollars in taxes.

Because tax laws are complicated and change regularly, it’s important to seek advice from a qualified tax advisor about how a trust will affect your situation.

An Estate Planning Lawyer’s Help Is Key

No matter the size of your estate or the goals you have, trusts are a versatile option worth considering when making your estate plan. An experienced estate planning lawyer can create a personalized trust and any other estate planning documents you need to protect you and your loved ones now and in the future.