Top Five Reasons Why You Need A Trust
I am often asked “ what is a trust? ” and “why do I need one?”
Here are five reasons why forming a trust might be in your best interest:
A trust can help you avoid the expense and complication of probate administration. Under a trust, you can have assets pass outside of your estate.
A trust can be used for tax planning and to reduce your income taxes. For example, a charitable trust allows you to donate assets during your lifetime, continue to benefit from income, and take a tax deduction.
A trust can serve to protect your assets from creditors. There are specific rules on the timing and circumstances under which you can use a trust as an asset protection device but when done properly, it is an effective tool.
A trust helps you control the disposition of your assets after your death. For example, let’s say that you wanted to provide for your children, but you did not want them to receive your estate in a lump sum upon your death. A trust enables you to dictate when distributions will be made and under what conditions.
A trust can be used to minimize estate tax. Estate tax can be as much as 50% of the value of an estate.
A trust can take many forms. Depending on your needs, the trust might be a revocable or irrevocable trust, a charitable trust, a grantor trust, a testamentary trust or an inter vivos trust and sometimes it will be a combination of the various forms.
The cost of a trust will vary based on its complexity. Seek a qualified attorney to discuss your options.