All adults should take the time to create an estate plan, but it’s not something that most want to do. Getting it together means making decisions about things like your assets and who you want them to go to when you pass away. There are two primary options for doing this when you’re creating your estate plan—your will or trusts.
Some people place assets in their will because they don’t think anyone will contest it, and that it’s the easiest option. The truth is that using the will to direct asset distribution after your death might not be the best idea.
Categories of trusts
A trust is a legal tool that can hold access for you while you’re living. Once you die, the contents of the trust are distributed in accordance with your wishes. All trusts are classified as either revocable or irrevocable. Those categories are based on what type of control you have over the contents of the trust and the trust itself once it’s created and funded.
You can change the terms or cancel a revocable trust. You maintain control over the contents throughout your life. An irrevocable trust is different. Once you create an irrevocable trust, you can’t change the terms or cancel it unless you get permission from the beneficiaries or the jurisdictional court.
Revocable and irrevocable trusts can all bypass the probate process. This helps to ensure that your loved ones get their inheritance in a faster and more private manner. A will has to go through the probate process, so the instructions in it become part of the public record.
Using trusts as part of your estate plan can help to ensure that your beneficiaries receive the assets as you intend. This is only one part of the plan, so it may be beneficial to work with someone who can assist you with getting everything set up in a legally enforceable manner.
