Maybe you’re thinking of making a will, or maybe you already have. Congratulations for being ahead of the game.
Most Americans don’t have a will even though financial advisers and estate planners always advise them to get one.
A will provides a set of instructions detailing what you want to happen, especially to your assets, after you pass away. Your family will be grateful to you for leaving them such a valuable road map.
But a will can only accomplish so much. Even with a will, there may be substantial estate taxes to pay, and chances for disagreements and uncertainties about estates can be limitless.
A living trust usually gives you much more control than a will. To help you consider making it your next step, here are some attractive features of a living trust.
Any assets you decide to place in a trust typically jump right past the probate process. Trusts can leave behind no muss and no fuss.
Holding back debts
A trust can protect your heirs from endless claims from creditors and can help reduce the debts to be paid from your estate.
Making a will doesn’t cost much. Wisely or not, some people even sit down alone and scribble their will on a pad of paper.
But the taxes your heirs will pay may be significantly reduced by a living trust, and trusts can protect the value of your estate by avoiding probate battles.
You call the shots
You get to choose who will make the decisions after you’re gone (and you can even change your mind).
You can also specify whether your assets will go to pay someone’s college tuition or medical bills, and under what conditions such as being married, declaring a certain major, going to a specific college, or whatever you like.
Keeping things private
Assets described in your will go through probate, which is a process of the public courts. Trusts bypass probate and aren’t ordinarily made public. You can, for example, privately give assets to individuals, organizations or causes that are your own business.