Wills and trusts are both crucial elements of a complete estate plan, though many adults settle for little more than a simple will. The reality, though, is that a number of exceptionally common circumstances require the use of a trust to ensure the enactment of your intentions after death.
A revocable living trust is an estate planning tool that bypasses certain limitations of writing a will and allows you to retain full control of placed assets during your lifetime. By learning more about the situations in which a trust is most appropriate, you can make the best situations regarding your estate plan.
1. Starting a family
When you start a family or welcome a new child to your household, naming them as a beneficiary in a trust can often be more suitable than leaving assets to them in a will. Whereas a will attempts to confer assets to your beneficiaries upon death, a trust gives you the ability to determine when in your child’s life they will receive their inheritance.
2. Expanding a business
If you own a business, you have a responsibility to your co-owners and employees to ensure that the company continues to succeed even after your passing. You can use a trust to seamlessly transfer your share of ownership to the individual most suited to the role.
3. Preparing for probate
Probate is a lengthy and sometimes burdensome process that is necessary for proving the validity of your will. If you have certain assets that you wish to bypass the probate process, placing them in a trust can be a prudent alternative.
Like a will, revocable living trusts are estate planning vehicles that you can amend throughout your lifetime. Starting a trust early in life ensures that you can adapt your plan as your situation changes.