Trusts may be set up as part of an estate plan for several reasons. For example, a Living Trust can help with estate tax issues, help avoid probate and address certain family circumstances. A Living Trust is a Trust that is established during a lifetime. It distributes assets similar to a Will.

Avoiding Probate can save your family both time and money. However, if your Living Trust is not set up properly and your assets have not been correctly transferred to it, your good intentions may be in vain.

Take Care of Your Children

Testamentary Trusts are created after your death, by the terms of your will. The assets to fund a testamentary trust usually go through probate. A common example of a testamentary trust is one created by a parent leaving assets to a child. The testamentary trust is administered by a trustee until the child reaches a stated age, at which point the assets are then transferred to the child.

Creating a Trust for minor children allows you to set rules for the use of your assets. For example, you can dictate that a child can access the funds only after they reach a certain age. Until your child reaches the designated age, the named trustee could be allowed to use funds in the Trust to pay for your children’s health care, education or upbringing. You could also, for example, stipulate that certain funds could only be used for college tuition payments.

Trusts are a great way to safeguard your children by making sure your money is protected and that it’s used to care for your kids according to your wishes. Depending on your family and your life, a provider lawyer can tailor a Trust to meet your specific needs. Each state has laws governing Trusts.

The Right Trust for Your Needs

Should you use a Living Trust, Testamentary Trust or a Revocable Trust?

There are a variety of types of Trusts and each one provides different benefits. Trusts can help you:

  • Manage estate tax
  • Designate heirs
  • Care for children with special needs
  • Care for minor children
  • Give to charity

Assign Assets to Avoid Probate

Without a proper Estate Plan, your assets—that is, your money, your home, anything you own—will be tied up in the Probate court system.

Probate can take up to 2 years to resolve an estate, running up legal bills of more than $12,000, on average. Transferring assets to a Trust allows them to pass without the hassle of Probate. Trusts are a powerful tool to avoid Probate and are available for estates of any size.