If you have assets of significant value that you wish to pass down to your loved ones once you have, unfortunately, passed on, then you may consider establishing a trust in your estate plan. Continue reading to learn more about the benefits of a trust and how an experienced Red Bank, New Jersey trusts attorney at Margaret M. Mahon, Esq., LLC can assist you in planning this.
What is a trust?
By definition, a trust is an estate planning document that will allow you to set the terms and conditions on how you wish to distribute your assets or financially provide for your loved ones upon your unfortunate death.
As the creator of a trust, you are known as the trustor. Meanwhile, your loved ones whom you wish to pass down your assets to are referred to as the beneficiaries. In addition, your trust will require a third party to take care of the assets on behalf of your beneficiaries, known as the trustee.
Does a trust come with benefits?
First of all, a trust can do many things that a will cannot. For one, a trust does not need to go through the probate process and its associated expenses. And so, your beneficiaries may be granted access to your assets much sooner. This may be beneficial if your beneficiaries need to pay bills or maintain the property in your estate.
Other examples that show the benefits of a trust are as follows:
- A trust is beneficial in the event of a divorce: if you have an outright inheritance, your former spouse may claim a share of your assets in a divorce or separation. But if you leave this inheritance in a trust, it may not be considered part of your marital estate.
- A trust is beneficial if your beneficiary is an excess spender: if you have an outright inheritance, your beneficiary may waste their money right away on bad purchases. But if you leave this inheritance in a trust, a trustee can gatekeep your assets.
- A trust is beneficial if your beneficiary is in financial difficulty: if you have an outright inheritance, your beneficiary may lose their inheritance if they find themselves in debt, bankruptcy, or business loss. But if you leave this inheritance in a trust, you can safeguard their inheritance.
- A trust is beneficial if your beneficiary is involved in a lawsuit: if you have an outright inheritance, your beneficiary may lose their inheritance when they are sued. But if you leave this inheritance in a trust, it will be considered a separate legal entity and thus protected.
With all that being said, if you believe that establishing a trust is in the best interest of your estate plan, then you must not hesitate in contacting a skilled Monmouth County estate planning attorney. The sooner you begin drafting this document, the better, so schedule your initial consultation with us today.