Why a Trust Might Be the Better Choice

Estate planning is a critical task for ensuring your assets are managed and distributed according to your wishes after your passing. While a simple will is a common choice, many are turning to trusts for added flexibility and control.

Understanding Trusts and Wills

A will is a legal document that outlines how you want your assets distributed after your death. It’s straightforward and typically easier to set up compared to a trust. However, a will must go through probate, a public and lengthy legal process.

The Advantages of Trusts

A trust is a legal arrangement where a trustee holds and manages assets for the benefit of the beneficiaries. Trusts come in various forms, such as revocable (changeable) and irrevocable (permanent). Trusts offer several benefits over wills, making them an appealing option for many.

Reasons to Choose a Trust Over a Will

One of the most compelling reasons to choose a trust is to avoid probate. Probate can be time-consuming, costly, and public. Trusts, on the other hand, allow for the private and direct transfer of assets, bypassing the probate process entirely.

Greater Control Over Asset Distribution

Trusts provide more control over how and when your assets are distributed. For example, you can direct that beneficiaries receive their inheritance at certain ages or milestones. You can also allocate funds specifically for education or healthcare.

Privacy

Unlike a will, which becomes a public document once it enters the probate process, a trust remains private. This keeps the details of your estate and beneficiaries confidential.

Protection Against Legal Challenges

Trusts are generally harder to contest than wills. This can be particularly important in situations where there’s potential for family disputes or challenges to your estate plan.

Estate Tax Benefits

An irrevocable trust can remove assets from your taxable estate, potentially reducing estate taxes while facilitating tax-efficient transfers.

Managing Assets During Incapacity

A trust can include provisions for managing your assets if you become incapacitated. This avoids the need for a court-appointed guardian or conservator.

Continuity and Efficiency

Trusts offer continuity in asset management. A successor trustee can take over without interruption, ensuring that your estate is managed seamlessly.

Protecting Special Needs Beneficiaries

If you have a beneficiary with special needs, a special needs trust can ensure they receive the benefits of your estate without disqualifying them from government assistance programs.

Situations Where a Trust Is Particularly Advantageous

In blended families or situations with estranged relatives, a trust can provide clarity and prevent disputes over asset distribution.

Large or Complex Estates

For estates with significant assets or complex holdings, such as businesses or property in multiple states, a trust can simplify management and distribution.

Desire for Long-Term Asset Management

If you want your assets to be managed for the long-term benefit of your beneficiaries, a trust can ensure this is carried out as per your wishes.

Key Points

Choosing between a trust and a simple will depends on your individual circumstances and estate planning goals. While wills are straightforward and cost-effective, trusts offer significant advantages in terms of control, efficiency, and privacy.

Trusts are particularly beneficial in avoiding probate, managing complex estate matters, providing for special needs beneficiaries, and when there’s a desire for detailed control over asset distribution.

In summary, while both wills and trusts serve vital roles in estate planning, trusts often provide a higher level of control and protection. By consulting with our firm, you can make an informed decision about which estate planning tool is best suited for your unique circumstances.

Take Action Today!

To schedule a consultation at our Oklahoma City estate planning office, give us a call at 405-843-6100. Our Tulsa location can be reached at 918-615-2700, and you can use our contact form to send us a message.

 

 

After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.

Latest posts by Larry Parman, Attorney at Law (see all)

Story originally seen here