When drafting a will, you may find that it doesn’t have a lot of options to secure your assets. For example, your estate could be taxed and your heirs may have to wait up to a year before they inherit the remainder. So, what can you do to avoid these issues?
For starters, you could create a trust. A trust is a legal document much like a will, but it can avoid estate taxes and probate. Trusts can greatly increase the security of your estate. When you make a trust, you put assets in the hands of a trustee. As a grantor, you can decide what assets the trustee will hold until they are distributed to beneficiaries.
Most people make revocable trusts, which allow you to add or take away assets as you wish. While this may seem like the best trust for you, you have the option to make multiple trusts.
What kind of trusts can you make?
Different trusts intend to do different things with the main intent of transferring assets to a beneficiary without difficulty. Here are a few trust that you may consider making:
- Pet trust: If you have a pet, then you may wish to put aside assets for their care. You could name someone who is responsible for caring for your pets’ needs and put aside assets that would be used for their food, grooming or medication.
- Charitable trust: You may wish to leave assets to a charity or non-profit. The charitable trust could give to this charity or private foundation in regular fixed payments or at varying payments to a percentage of the trust’s principle.
- Special needs trust: You may have a beneficiary who benefits from Medicare or Medicaid. You could create a special needs trust that limits how often assets are distributed so the beneficiary is still eligible for their medical benefits.
There are many kinds of trusts. When you plan out your estate plans, you should understand all of your options. Legal guidance can make it a lot easier to get the plan you need.