As you look into building an estate plan, one question that might come up is if you’d like to put together a trust. There are many different types of trusts to consider, which is something your attorney will discuss with you.
Do you need a trust? Yes, in most cases, you do. Here’s why you need it and how it can help.
A trust helps you protect your assets
To start with, a trust helps you protect your assets. It’s an easy way to avoid probate and to make sure your family doesn’t need to go through probate for those assets if you pass away.
You may think that a trust is only for wealthy people, but the truth is that trusts are a great tool for almost anyone to use. Whether you’re worried about protecting your family home or want to put safeguards in place to protect yourself and your loved ones in the case of incapacity or disability, a trust can be an excellent tool to use.
What are the types of trusts you can select from?
There are a few different kinds of trusts, but they all fall under revocable or irrevocable terms. Irrevocable trusts cannot be changed once you set them up. Revocable trusts can.
If you place your assets into a revocable trust, then you’ll still have access to your bank accounts and have the same taxes to consider as you would without it. With an irrevocable trust, you may lose access to your assets and have differences in your taxes, so it’s important to talk about these issues with your attorney before deciding which kind of trust would be best for you.
A trust can have benefits such as protecting you against collections activity or holding life insurance benefits on behalf of a beneficiary after you pass away. There are many factors to consider, so it’s smart to look into trusts now and to decide if they feel right for your circumstances. Most people do benefit from using these tools to protect their assets. You may find that they are a good tool for you to use as well.