Even if you are not super wealthy there are many benefits to setting up a living trust. A living trust is a document set up by an estate attorney to help you manage your assets, including property while you are alive and names a trustee to act on your behalf to carry out your instructions, if you become incapable of caring for yourself or pass away. Here are a few of the top reasons why you should set up a trust.
Avoids Probate- A trust allows your heirs to bypass probate which can be a lengthy process and your estate can be charged up to 5% in probate fees. This can mean a substantial savings in time, legal fees and paperwork.
Protection Against Disputes- Unfortunately there may be someone who is unhappy with the way you have instructed to have your assets distributed. A trust is harder to contest than a will is because they have to be able to prove that you were under undue pressure or influence in setting up the trust which is nearly impossible.
Flexibility- Trusts offer more flexibility in how you can distribute the funds. In the case where you may have minor children you can specify how the money is spent and when they would have full rights to the funds.
Avoids Estate Taxes- A trust can provide a way to avoid or reduce estate taxes because assets and property placed into a trust are not subject to these taxes.
Minimizes Family Conflicts- You can specifically detail exact items and monetary distributions to be given to each beneficiary. This helps to curtail any of the “who gets what” problems that may arise with family members.
Privacy- Trusts, unlike wills, are private because they do not go through probate. This means your assets and who you leave them to are kept private.