Creating your estate plan is one of the most important things you can do to help your loved ones after you pass away. One critical thing to think about is what will make it as easy as possible for your beneficiaries their inheritance.
If you opt to leave assets to your loved ones in a will, they will have to go through the probate process to get those assets. This can take time and may be costly. An alternative to the will is to use a trust to pass those assets down, which means those assets won’t have to go through probate.
Revocable or irrevocable?
There are two categories of trusts – revocable or irrevocable. A revocable trust can be changed or altered if you desire. You can’t change an irrevocable trust unless you have permission from the beneficiaries or the court.
What’s the benefit of an irrevocable trust?
Because you can’t change an irrevocable trust, you and your beneficiaries will have several benefits. The assets that you include in the trust are removed from your estate, which can reduce the value of your estate and may help to lower tax liability.
Another benefit is that your creditors can’t seize the assets to satisfy your debts or judgments against you. This can help to ensure they receive their full inheritance.
Setting up and funding an irrevocable trust must be handled properly. Working with someone who understands how to create a comprehensive estate plan is important to ensure it accurately relays your wishes.
