If you are beginning to think about estate matters and how your assets will be distributed after you are gone, you might consider setting up a trust, and you do not have to be a millionaire to do so. Not only will a trust serve as a vehicle to protect your assets, it can also give you peace of mind, knowing that your affairs would be managed properly in the event you become incapacitated.
Set up a trust and avoid probate
Probate is the often time-consuming process whereby a judge determines the validity of a will in which you have provided instructions for the distribution of your assets and real property. A trust enables your heirs to avoid probate, which also means they will realize considerable savings in time, paperwork and legal fees. The probate red tape may take a year or more to complete and the fees alone might represent as much as 5 percent of the value of your estate.
Protect your assets
Since trusts are not required to go through probate, your assets and the intended recipients will remain confidential; there will be no public record. When you establish a revocable living trust, you will also have to establish a pour-over will, which is used to bring in any assets that happen to exist outside the trust if you should die unexpectedly. Once this occurs, distributions can be made to your heirs as you directed, and much more quickly than the assets would have been distributed during a probate process.
Ensure that your affairs will be managed properly
The third benefit of a trust, after protecting your assets and avoiding probate, is that it will serve as the framework for managing your affairs if you can no longer do so. If you should become incapacitated as the result of a car accident, for example, or suffer from dementia later in life, having a revocable living trust will be an enormous benefit. When you set it up, you name a trustee who will be able to step in and manage your affairs and see that assistance continues with regard to any beneficiaries you have been providing for. Your trustee could be a family member, trusted friend or professional.
Depend on legal support
Although making decisions as to how your assets should be handled after your death is a task you probably have been putting off, it need not be the disturbing chore you imagine. You can turn to an attorney experienced in estate planning to help you set up a living trust and take this particular burden off your shoulders.