Completing your last will and testament still might not put your mind at ease. You know your family will still have to go to probate court to secure their inheritance. Fortunately, creating a trust could spare your family a lengthy time in probate.
The basic benefit of having a trust is being able to completely bypass probate proceedings.
How a trust works
Establishing a trust means you create a legal agreement with a trustee to manage assets on behalf of beneficiaries. A trust can pay out during your lifetime or after your death. You can place many kinds of assets in a trust. You may include cash, or property such as a vehicle, a piece of real estate and even digital media and accounts.
The reason a trust avoids probate is because it pays directly to an assigned beneficiary. There is no need for a probate judge to adjudicate the trust. Other assets such as life insurance policies and retirement accounts with direct payouts work the same way.
Other benefits of using a trust
A trust remains private since it does not go through probate and become part of the public record. You may spare your family problems that could result from having your inheritance be a public matter.
Also, you can structure a trust to reduce taxes on assets in the trust if you have a lot of wealth in your family. Additionally, creating an irrevocable trust may shield your assets from creditor claims if you become the target of litigation.
Trusts are accessible to people of different income levels. Even if your estate is fairly small, you might still help your family gain their inheritance through a trust.