Creating an estate plan is a multistep process that involves taking an inventory of assets and determining who should receive what when you pass away. Once you know that information, you have to decide what method to use to get those assets distributed. Some people choose to use their will to dictate that information, but there’s also the option of trusts.
Trusts provide the beneficiaries with more privacy than a will. When you use a will to get assets to your loved ones, the process will go through probate court. Trusts bypass the probate process, which means that the terms aren’t part of the public record. There are also other benefits that come with trusts, but those are dependent upon the type of trust you choose.
Irrevocable trust benefits
An irrevocable trust is one that can’t be changed once it’s set up and funded. The only exception to this is if the named beneficiaries or the court approve the changes to the trust.
Once you set up and fund an irrevocable trust, the assets held by the trust are maintained by the trustee. That distinction allows those assets to be protected from your creditors. Since the assets aren’t under your control, your creditors can’t claim them to cover judgments or account balances.
These trusts also remove the assets from your estate value. This is particularly beneficial if you have a high-value estate since it may enable more of your wealth to pass down to your loved ones.
Setting up your estate plan requires much more than just saying who gets what, so it’s best to work with someone familiar with these matters. This may help you to ensure your wishes are relayed in a legally enforceable manner.