Trusts and the Benefits They Offer ExploredShare this post
Trusts and the Benefits They Offer Explained
Trusts are a plan to take care of the people you love when you’re no longer around or lack capacity to assist them. Traditionally, a trust is used for minimizing estate taxes and can offer other benefits as part of a well-crafted estate plan.
In more specific terms, trusts are a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.
Creating a trust involves a written document that combines your assets for your benefit during your lifetime and provides for the transfer of those assets to a specified individual or individuals upon your death. For legal purposes, these individuals are referred to as secondary beneficiaries.
Trusts and the Benefits they Offer
One of the most attractive benefits of a trust is that they do not require probate. There are many circumstances in which a will must be administered through the probate process, which can be costly, time-consuming, and extremely public in nature. As a result, the administration of a trust following a decedent’s death typically allows a faster distribution of the assets.
A trust can also provide a method for increasing your financial stability and providing a better outcome for the secondary beneficiaries. A trust’s assets can remain in investment accounts during the founding beneficiary’s lifetime, allowing them to increase in value. Additionally, a trust provides the founding beneficiary with significantly more privacy than a will. A trust can be designated as confidential and remain unavailable to prying eyes.