Estate planning is the process of deciding how your money and property will be distributed after you pass away. Most people know about a Last Will and Testament, but trusts can be an even more powerful tool.
What Is a Trust?
A trust is a legal arrangement where a person (called the grantor, settlor, or trustmaker) transfers assets to a trustee. The trustee manages and distributes those assets to the beneficiaries according to the terms of the trust. While some people avoid trusts because of the initial cost, trusts often save time, money, and stress later. They can be a key part of a strong estate plan.
Key Benefits of a Trust
1. Avoiding Probate
Trusts help avoid probate — the court process of validating a will and distributing assets. Probate can be time-consuming, expensive, and public. A trust allows assets to pass directly to beneficiaries, saving time, reducing costs, and keeping your affairs private.
2. Flexibility and Control
Trusts can be customized to fit your needs. If you have minor children or beneficiaries who are not ready to handle an inheritance, you can set conditions for when and how they receive money. This gives you control and peace of mind that your loved ones will be cared for in a responsible way.
3. Asset Protection
Trusts can shield assets from creditors, lawsuits, or future financial risks. Moving assets into an irrevocable trust removes them from personal ownership, making them harder for creditors to reach. Trusts can also ensure your finances are managed by someone you trust if you become incapacitated.
4. Supporting Charitable Giving
If giving back is important to you, a charitable trust can allow you to donate to causes you care about while keeping an income stream during your lifetime. This option can also come with tax advantages and help you leave a lasting philanthropic legacy.
5. Reducing Estate Taxes
Certain trusts can lower estate tax liability, helping you pass more wealth to your heirs. Tools like irrevocable life insurance trusts or generation-skipping trusts are designed to reduce taxes and preserve assets for future generations.
Adding a Trust to Your Estate Plan
Including a trust in your estate plan provides privacy, control, and peace of mind. It can protect assets, speed up inheritance, and help you support loved ones and charities according to your wishes.
Our experienced estate planning attorneys can guide you through your options and create a plan that reflects your goals. Call us today at (207) 848-5600 or visit our CONTACT page to schedule a consultation.
This article is for informational purposes only and does not create an attorney-client relationship. For legal advice, speak with an attorney.
