Trusts are a popular element to estate plans because they have distinct advantages. Some of which include:
-You can control the assets – Let’s say you draft a living trust and place assets in it throughout your life. If at some point you become incapacitated — for example, due to an illness — a trustee can ensure you still have access to your assets. Once you pass away, a trust can also ensure the assets are safely distributed.
-Your legacy can be protected – A trust lawyer can draft a trust that protects your legacy and prevents creditors from coming after your assets.
-You skip probate – Unlike a will, a trust is not required to go through the probate process. Your heirs will receive everything held in the trust immediately and everything remains private. If there are any assets not included in the trust, they will likely need to be probated.
-You can save money on taxes – A trust lawyer might encourage drafting a trust if you want to save money on taxes. There are many ways to do this and sometimes it will require having more than one trust. It may also be possible to gift assets to your loved ones to reduce taxes owed.
Obstacles You Might Face
Even though trusts are a popular estate planning tool, there are a few obstacles that might get in the way of drafting one. For example, there are rare situations in which a financial institution will not fund a trust. Bear in mind, a trust lawyer may help you to avoid obstacles altogether, so be sure to consider having one.
Obstacles that may stop you from having a trust include:
-You are being asked for more information – During the estate and trust planning process, you will be required to complete and sign a lot of different forms. If any of the documentation is incomplete or incorrect, financial institutions may deny you the trust.
-Wrong titling – A trust lawyer likely knows of cases in which a financial institution could not title their account according to the clients’ request. For example, you cannot name your trust the same as your IRA and vice versa.
-Miscommunication – Financial institutions have many clients, and it is possible for an error to occur because of miscommunication. If you are not clear about your needs, or you word something wrong, you might consider asking your trust lawyer to clarify your wishes to the financial institution.
-The bank does not understand trusts – Although it might surprise you, it is possible for smaller, or online only banks, to decline the ability to fund a trust. If this happens, you will need to explore your options. A trust lawyer can help you with this.
Speak with a Trust Lawyer Today
Despite any obstacles that may occur, there are significant advantages to having a trust. If you are ready to explore the many different types of trusts, and what is best for you, call a trust lawyer, like a trust lawyer in Chandler, AZ.
Thanks to Citadel Law Firm for their insight into some of the advantages of having a trust.