Estate planning is a stressful thing. Nobody likes to consider their own mortality, and making end-of-life plans puts it in square focus. However, it’s important for everyone to arrange these plans so that your descendants and assets are cared for, even ensuring that your affairs are kept in order should you become unable to make certain decisions for yourself.
One of the more popular ways to protect your assets, medical decisions and finances is by using a trust. A trust enables you to maintain a level of control over how your money is spent. There are, however, certain benefits and risks associated with this approach. Explore the various pros and cons of using a trusts when it comes to estate planning, and how an estate planning attorney can help you make the right choice.
What is a Trust?
A trust is an asset pool held for the benefit of and use by a third party, or beneficiary. This beneficiary is doled out assets as controlled by a trustee. There are two basic kinds of trusts: those established in a will, or living trusts determined while you’re still alive.
Trusts last until a certain set of predefined conditions are met. For example, you could design a trust for a young heir to become accessible when they reach 18 years old, at which point the trust ends and the inheritance transfers completely to them. As the creator of the trust, you are the settlor. In the case of a living trust, you can also be the trustee.
Benefits of a Trust
There are several benefits to using a trust. The most important is that it tends to be more efficient than simply doling out assets in a will. It allows you specific means of allocating assets through using specific, controlled manners. It also helps to avoid estate taxes, and gives you control over how your beneficiary will receive your assets. In brief, a trust ensures a beneficiary won’t squander their inheritance.
A trust can also be used in case you become incapable of making decisions for yourself. It can guarantee your medical care is covered, and your daily expenses and bills are paid. If needed, it can provide for someone to take over as caregiver.
Problems with a Trust
The drawback of a trust is that it can be more complex to set up than a will. Arranging a trust takes effort, funding and time. More notably, you can’t simply take a trust back after you establish it. You have to take particular steps to revoke a trust, and then you’ll have to redefine how the assets are distributed. A revocable trust can circumvent some of these problems, but this adds an additional layer of complication.
Working with a Trusts Attorney
If you’re considering creating a trust for your property, you’ll want the best possible advice. A qualified Montana trusts attorney can make sure you take the right steps and avoid critical mistakes, ensuring your assets are well protected and your heirs are well cared for. For more information about trusts or to get started on creating a trust, call Tanko Law today.