Creating an estate plan is the best way to ensure that you will leave your loved ones protected in the event of your death or incapacitation.
Leaving all your plans well established, clearly and specifically, will help your loved ones avoid unnecessary complications and problems, giving you peace of mind and the security that they will not have to worry about anything.
A trust is one of the best options you can choose to transfer your estate to your loved ones when you are gone. Let’s see what a trust is about.
What is a trust?
A trust is a legal contract through which one party known as a trustor grants another party, the trustee, the right to manage their property or assets for the benefit of a third party, the beneficiary.
Trusts are a way of providing legal protection to the trustor’s estate to ensure that it is distributed according to their wishes. Trusts can not only save time, but can also include tax savings, asset protection, and flexibility in asset management.
Assets are administered according to the terms established in the trust agreement in order to achieve specific personal, financial, or estate planning objectives.
Advantages and disadvantages of a trust
There are different types of trusts to choose from, depending on a person’s circumstances, all with advantages and disadvantages. Here some of them.
Advantages:
· Avoid probate court. By having a trust established, the state would not have to go through probate court proceedings, making the process faster and smoother.
· Privacy. Your assets would not have to be made public and would remain private.
· Control of your finances. Setting up a living trust will help you establish how and when your estate will be distributed.
Disadvantages:
· Complexity. Trusts can be complex and difficult to establish, understand and manage.
· Cost. Setting up and maintaining a trust can be expensive, requiring ongoing legal fees and administrative costs.
· Inflexibility. Trusts can be inflexible, as they are difficult to change once they are established.
If you have questions or concerns about whether a trust is right for you, contact us today. At the Faloni law firm, we will help you analyse your situation and see what is best for you and your loved ones.