Wills and Trusts are the estate planning documents. These are the assets passed on to the beneficiaries at death. But, there are several advantages to using a Trust over a Will.
Here are Few ways in which a Trust is better than a Will to Pass your Estate to your Beneficiaries:
A Trust can be used to Avoid Probate. Probate is the method of changing the title on assets when someone passes away. Assets that are owned in a deceased person’s individual name and for which there is no named beneficiary are no longer accessible, after the owner of the asset has died. For the family members to gain access to accounts or other assets in the deceased’s individual name, they must file a petition with the probate court. Also, wait for the court to approve the Will and appoint the Personal Representative.
It can provide Creditor Protection for the Inheritance you leave to beneficiaries. Several people worry that the inheritance they leave to their children will be lost to their children’s creditors. Unfortunately, this is often the case when the assets are distributed to beneficiaries via a Will. A Trust permits the maker to safeguard an inheritance from the reach of the beneficiaries’ creditors. This is done by keeping the assets out of the name of the beneficiary. Ownership of the assets remains in the Trust. The beneficiary will have access to the assets in accord with the directions you leave in your Trust. You may also permit your beneficiary to serve as Trustee. Thus, allowing the beneficiary to manage her own inheritance.
A Trust can Defend Governmental Benefits for a Person with Disabilities. If you have a child, grandchild or other beneficiary with disabilities, then a Trust is a must. If you leave assets to a person who receives needs based governmental benefits via your Will, this will place your beneficiary in the difficult position. Leaving assets to a person with incapacities via a Trust is the finest way to ensure those governmental benefits are preserved.
A Trust can Administer Assets for Minor Beneficiaries without the Intervention of Court – Leaving money directly to a minor may create an administrative problem. This is because the law provides that a minor does not have the legal capacity to receive assets. The parent of the minor also does not have the ability to act as the child’s legal representative until the court says so.
Creating a Trust to receive assets passing to a minor, or even to a young adult beneficiary, is an ideal way to ensure that the court is not involved in the process. Also, that the person you want to manage assets for the beneficiary is able to do so. The beneficiary can utilize the assets only for purposes you decide are important and/or at ages that you dictate.
For any help with regard to trust and will, you may get in touch with an experienced Will and Trust Attorney.