The question isn’t whether you need a trust, it should be, “What type of trust do you need?” The answer lies within the scope of knowledge after a qualified advisor, attorney and account review your estate.
There are different types of trusts for different situations, but one thing is definite: what you do not own cannot be taken from you by a creditor.
Question: Wills versus Trusts; is trust administration faster than probate?
Answer: Probate can take anywhere from six months to a year. With a trust, the transfer of assets can be completed in as little as a few days to a month.
Question: Is trust administration more private than probate?
Answer: Yes, only the Trustee and the Beneficiaries have access to the information in the Trust Deed. In the process of probate, court records and all documents in the file are public record. Therefore, the contents of a Will, the assets in the Estate, debts and claims against the Decedent, and who will be receiving what can be viewed by anyone.
Question: Can a guardianship be avoided by use of a trust?
Answer: No. Children are not considered capable of handling their own financial affairs, state law requires that a guardianship for the benefit of the minors be established. A guardianship has at least two main disadvantages:
A guardianship is similar to a probate proceeding, most or all actions require court approval, and there is need or extensive court supervision and corresponding attorney’s fees and costs.
Usually, a court allows investment of funds into anything but a FDIC protected type of investment. Mutual funds or other investment options are off limits. With a trust, a person can invest in high-yield options so that the children can receive substantially more. Also, a trust allows such funds to be held by a Trustee and disbursed as needed by the minor for education or any other demonstrable need, giving the Trustee much more control over how the funds are disbursed to the child.
Question: Can estate taxes be avoided by use of a trust?
Answer: Should a Decedent’s estate be worth more than $1 million, it is subject to estate taxes. For a married couple, a properly drawn A/B Trust results in the first $2 million of their assets being protected, instead of only $1 million. Therefore, the Estate Taxes on that amount would not have to be paid and could instead go to the heirs.
If you would like to discuss your options concerning a Will versus a Trust call for a Free twenty Minute Consultation.
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