5 Reasons to Create a Trust
When it comes to estate planning, people often wonder what the benefits are to creating a trust. Here are the five main reasons for creating a trust:
Control assets. A Trust can be used to retain control over the assets within the trust for a elected period of time, and may survive death if so designated.
Protect assets. A Trust allows you to put assets in the hands of a trusted advisor or administrator (the trustee) for proper management. In addition, putting assets into a knowledgeable trustee’s hands can also relieve your beneficiaries of what they may consider to be a burden for which they are unqualified.
Save on taxes. For married couples, all estate taxes can be avoided upon the death of the first spouse. A Trust can also ensure your own children benefit from your estate by establishing a tax by-pass Trust to hold property for children, while still allowing the trust funds to provide for the surviving spouse. The Trust assets will not be subject to estate tax upon the death of the surviving spouse.
Avoid probate. A Trust is a separate entity that continues after the death of the creator. The trustee can assume management of the estate and distribute the assets of the trust to beneficiaries without having to go to court.
Avoid a conservatorship. If the Trust creator becomes disabled or incapacitated, the successor trustee can take over management of the Trust without going to court to appoint a conservator.
