Last column I explained the basic difference between a Will and a trust. In essence, a Will simply identifies who you want to receive your assets at your passing. However, a trust allows much more control over how your assets will be used to address circumstances specific to your family. More on this to come.
There are many other situations in which a trust is very effective. For example, those who wish to avoid “probate” can use a trust to hold their assets. This is especially effective if you own land in more than one state. A trust can help you avoid paying for probate in two different states.
Probate is a process to ensure that property owned by a deceased person is conveyed to the person entitled to receive it. Typically, probate must be done in each state where the person owns land. “Snow birds” and “sunbirds” who own property in two different states should consider putting those properties into a trust and avoid paying for probate in two states.
Trusts can also provide more privacy. In the probate process, even people who may not receive anything under a will can have a right to examine an inventory of the deceased person’s assets. On the other hand, only those people actually receiving something from the trust have the right to review the trust.
While these are good reasons to consider a trust, a properly drawn trust actually provides many more advantages. It can allow you to maintain a significant level of control over the use of your assets if you become incapacitated or after passing away. A will allows you only to state who receives your things upon your passing.
That flexibility and control can be a significant advantage depending on the risks to your estate and the complications that arise in each of our lives.
© 2016 Steven J Wright