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6 Advantages Of Trusts

On behalf of Block Legal Services, LLC posted in Trusts on Monday, December 5, 2016.

When it comes to estate planning, trusts are frequently overlooked. Most people simply do not know all of the advantages that trusts have to offer. Here are six of them:

1. Flexibility

Trusts offer a level of flexibility that cannot be achieved with a will. Furthermore, trusts come in many varieties, from general revocable trusts to more specialized trusts like special needs trusts and charitable trusts. Trusts allow for creativity and can be customized to meet your needs.

2. Control

Trusts offer more control than a will. First of all, wills do not have power over all assets. Additionally, wills have limitations in terms of how assets are distributed to beneficiaries. With a trust, you have much more liberty in determining how assets will be distributed to, for example, minor beneficiaries. This can help your beneficiaries make the most of their inheritance.

3. Probate Avoidance

Not only is probate a public court process, it is complex, time-consuming and often expensive. Many people would prefer that their families not have to deal with the stress involved. However, probate avoidance cannot be accomplished with a will. In fact, a will is essentially a set of instructions to the probate court. A trust, on the other hand, may be used to keep an estate out of probate court.

4. Protection From Estate Taxes

There is no estate tax in Wisconsin. There is a federal estate tax. However, it only applies to very large estates. Those whose estates are large enough to be susceptible to estate taxes may benefit from the protection offered by a trust.

5. Benefits Protection

If a loved one receives some type of government benefits, like Medicaid, it is important to be aware that an inheritance could impact eligibility. A trust may allow you to distribute assets to a loved one in a way that does not impact their eligibility for benefits.

6. Asset Protection

There are many threats that could chip away at the value of an estate. Trusts may offer an extra layer of asset protection, shielding assets from creditors and lawsuits.

Creating A Trust

The protections offered by a trust are not necessarily automatic. The trust must be properly structured and integrated carefully with other estate planning mechanisms. This is why it is so important to work with a dedicated estate planning attorney who understands how to create effective trusts.