Personal Finance
Why Setting Up A Trust Should Be On Your Family's To-Do List
Estate planning tools and strategies are more affordable than ever before. Find out if a trust is the best option for you.
This post is sponsored and contributed by a Patch Brand Partner. The views expressed in this post are the author's own.
For most of us, the best feeling we can have in life is believing we've done everything we can to protect the things that matter most to us. Knowing our family, our loved ones and even our homes are safe gives us peace of mind that not much else can.
This may be one reason why, in recent years, there's been such a rise in popularity and accessibility around the concept of estate planning. It is appealing, after all. Planning for the future offers us a sense of steadiness. It gives us the security in trusting our loved ones will be OK, even when we can’t be there.
Trust & Will is on a mission to make estate planning simple, affordable and accessible for all Americans. As people begin to better understand the importance of a solid estate plan, they seem to be more willing to accept this one, simple truth: One day, their legacy will be all that's left to protect those they've spent their entire life loving. So how do you make sure that your legacy is left intact, that your loved ones are sheltered and protected the way you want?
Consider a trust.
For starters, what is a trust?
A trust, in simplest terms, is just a legal document that can protect your property and assets throughout your life, and perhaps even more importantly, once you’re gone. Trusts are an important part of any estate plan. The perception of what a trust is, and who needs one, has changed over the years. People are becoming increasingly more willing to think about their future, and they seem to want to prepare for it.
The result?
There is a willingness to make the effort to plan for that unthinkable, yet inevitable, time. It's a shift in thinking, really, particularly for those of us in the younger phases of life, when that future may still seem so far off.
The bottom line? There really is no better time than right now to start preparing. And one of the most effective things you can do when it comes to your estate plan is create your trust.
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What do trusts protect? Do you need one? If so, then when?
It's easiest to think of a trust like this: It's just another part of your legal estate planning. It's a document that holds and owns your assets and includes clear direction from you as to how you want your estate handled in the future. Trusts differ from wills in a variety of ways, and they can be both more powerful and more effective in protecting and passing down property and assets to your loved ones.
Here are five things you should know about trusts:
- They're not just for the wealthy (anyone with $160,000 or more in assets should have a trust).
- If you own a home, you should have a trust.
- Trusts are private documents and avoid probate — unlike a will, which is a public document and will go through a public probate process, Trusts offer you privacy so nobody other than the person or people you want will have access to the types of property you own and the values associated with your estate.
- Trusts are the most comprehensive estate plans available to protect your home and family.
- The final step in creating a trust is just retitling your assets to make them “trust-owned.”
Your trust dictates, per your wishes, exactly how and when your property and assets should be handled upon your passing.
Still confused about Estate Planning? Trust & Will breaks down what you need to know.
OK, but why have a trust and not a will?
Trusts can be beneficial on many levels. And, contrary to a relatively popular belief, trusts are NOT just for the very rich. Trusts can be a better alternative to a basic will in that they offer many advantages wills simply don’t. Not sure if you need a trust?
A trust can be a solid choice if you:
● Own one or more houses.
● Have a total combined asset value of $160,000 or more.
● Want to include stipulations on your heirs’ inheritances.
Benefits of a trust over a will include:
● Privacy — Assets in a trust need not be publicly disclosed.
● Avoid probate — Probate is a lengthy, costly and often-stressful process that involves the courts as they distribute your estate after you pass away. Even if you have a valid will, your estate will still go through probate. Probate can cost anywhere from 2 to 7 percent of your estate. That’s money that should be going to your heirs. Instead, it will go to cover fees for appraisals, accounting, attorneys, bonds, the courts, an executor and other miscellaneous costs.
● Estate and gift tax reduction — Items put in a trust will not count toward the value of your estate, thereby reducing any taxable amount your estate may owe upon your passing.
● Protection — Because the trust owns everything, it acts as protection against liens, lawsuits and creditors.
● Control over asset distribution — Having confidence that your assets will be handled the way you envision can be a huge relief. Families can be complicated these days. Blended families, divorce, extended family, charitable wishes — all can add up to a not-so-cut-and-dried estate. But a trust allows you to plainly, succinctly and clearly outline how, where and when you want assets to be passed down.
How much does it cost to establish a trust?
The traditional route of creating a trust has been an expensive one. It used to be something that required a lot of prep time and multiple meetings with an estate planning lawyer. You could expect to pay thousands of dollars to create a trust-based estate plan with an attorney.
But, fortunately, that's just not the case anymore. Thanks to the advancement of online estate planning sites such as Trust & Will, the process can now be affordable, convenient and, most of all, simple. You can create a fully customized, state-specific trust with Trust & Will for just $399, saving you thousands of dollars in legal fees. But beware, not all online services are the same. It’s important to find one that’s backed by legal expertise, has stellar reviews, offers excellent customer service and help and, most importantly, understands how much is at stake.
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Experience the Trust & Will difference.
Trust & Will makes estate planning easy. Address all your needs in one place, all from the convenience of your home. From trusts, to pour-over wills, to guardianship documents and health care directives, Trust & Will is changing the game when it comes to making sure your estate is set up to be in good hands.
