A trust can enable you to protect the assets you pass on to your beneficiaries for years after your death.
Even if your heirs are financially responsible, mature adults, there are still situations in which having a trust can be beneficial. You can protect your children and loved ones from unexpected creditors, lawsuits and divorces.
Trusts and asset protection
Trusts are useful for safeguarding assets and keeping them in the family. For example, if you leave funds to your child and they divorce later, your trust could prevent those assets from becoming marital property. In addition, if your beneficiary faces a personal injury lawsuit after a car crash, you can protect their inheritance by setting up a trust. Trusts can also guard assets from estate taxes. Finally, if you have heirs with substance use or gambling issues, a trust can help limit spending and prevent the loss of family wealth.
Advantages of using trusts
Trusts allow you some influence and control over your estate after you pass away. Furthermore, including trusts in your estate plan can reduce the likelihood of a court challenge that causes stress for your family and loved ones. You can also set up a trust to help your beneficiaries avoid probate. Keeping your estate out of probate not only protects your privacy but also saves your family time and money.
Even if you believe your heirs can make sensible financial decisions, passing on your assets by using trusts in your estate plan offers many benefits. You can help your children manage and safeguard their inheritances with trusts.