If you have minor children, loved ones with diminished capacity, a substantial amount of assets, or have very specific instructions for how, when and to whom you want your estate to be distributed after you die, then a trust could be for you.
Generally there are two types of trusts: revocable or irrevocable. A revocable trust is a trust that can be changed at any time during the owner’s lifetime, and becomes irrevocable upon the owner’s death. On the other hand, an irrevocable trust is one that cannot be changed or revoked after the agreement has been signed. Whether you need a revocable or irrevocable trust will depend on your personal story.
With a trust, assets are either placed into the trust during your lifetime, transfer upon death or “pour over” from a will. Whether or not the estate will need to go through probate will depend on how the assets transfer to the trust. As we have discussed before, wills generally go through probate to establish validity and distribute your assets according to your wishes through an executor. A trust, on the other hand, by and in itself does not go through probate, normally resulting in a faster distribution of your assets. Should you so choose, you can potentially have your successor trustee pay your debts and distribute your assets according to your instructions. This process is especially helpful when handling out-of-state property that is owned by the trust. If out-of-state property goes through a will, it must go through probate in your state as well as in the state it is located.
Additionally, the level of privacy between a trust is significantly different from that of a will. A trust is not made public, so your estate will be distributed in private. A will is public record, so all transactions will be public as well. Furthermore, trusts offer the ability to control how your assets are managed both during and after your lifetime, making them more appealing for those looking to care for a child or family member with special needs, or managing a family business. A trust even allows you to specify certain conditions that must be met in order for a transfer of assets to be completed. There are many options for special-use trusts that can be established to meet various estate planning goals, such as charitable giving, tax reduction and more.
Whether or not you need a trust, and what kind if you do, will ultimately come down to your own personal goals and your family. If you have questions about estate planning or you are wondering if a trust is right for you, please contact the estate law attorneys at Winslow & McCurry, PLLC at (804) 423-1382.
