As someone who is working on estate planning, one thing you need to get to know is how a trust can help you. Trusts are fantastic for protecting your assets. They prevent your assets from being taken from you due to lawsuits or collections. They also help you distribute your assets upon death in the manner that you thought would be best.
Looking at the first reason to have a trust, to protect your assets against litigation, consider this. As you age, if you have debts, like medical expenses that you can’t pay, then credit collectors may come calling. These debt collectors could even take you to court trying to get what they are owed.
Trusts protect your assets
If you don’t have your assets in a trust, you could be asked to repay what you owe based on the value of your estate. You might be expected to liquidate some of your assets to pay the other party’s losses.
On the other hand, if you do have a trust (and it must be irrevocable) then your assets may be protected against litigation. Only assets that aren’t in the trust would be at risk.
Trusts carry out your wishes
The next thing to consider when you’re deciding if you want to set up a trust is that a trust can help prevent beneficiaries or heirs from getting the wrong assets. Your trust can be specific. It may help prevent the squandering of your assets by heirs, and it might help prevent fights over who gets what, too.
If you have a complex estate, trusts can make sure that your assets are directed to the right places following your death. You can also set guidelines to make sure those assets are used in a way that you’re satisfied with. For instance, if you leave $100,000 to your child for educational expenses, you could ask that the money is used toward their education first. Then, any remaining money could be distributed following their graduation.
Trusts are great tools for people to use in their estate plans. If you’re interested in them, your attorney can talk to you more about how they work to protect you.
