Advantages of a Trust

March 25, 2014. The last post, in the spirit of National Nutrition Month, focused on the first aspect of a healthy estate plan: a Will. But a Will is not without some shortcomings. The answer to some of these inadequacies is a Trust; another step up the planning palate. Being a more refined course, it is more expensive. It is also not appropriate for everyone, but it is for more people than you would think. Like a Will, a Trust allows you to decide how you want your property passed on. However, it allows for longer planning. Instead of turning stuff over to the next generation right away, property in a Trust can be held on to for a longer period of time. During the time the property is held in the Trust, it is held “for the benefit” of another person, usually a spouse or a member of the next generation. The Trust can use the property to help pay for education, medical assistance, and otherwise provide income to this person, called the beneficiary. The assets in the Trust can also be distributed outright slowly to the beneficiary overtime, easing them into financial responsibility over the property.

Trusts also offer another benefit over Wills: creditor protection. When property is distributed to someone, the property becomes subject to that individual’s creditors should they exist. However, when property is held in Trust, the property is insulated from most creditors of that individual. This is not a feature of the typical Will.

There are other distinguishing features of a Trust over a Will. Trusts handle the transition from the death of the creator of the Trust and the next generation in no more than a couple months, whereas a Will can, and regularly does, take upwards of 12 months. The reason for this is that Trust property never becomes part of the probate process, so does not suffer its delays. This also means that the Trust terms do not become common knowledge since they are not public documents. Finally, though a Trust is more expensive at the start, it can save substantial probate costs and attorney fees at the tail end of the process since these are not assessed against the Trust property. Altogether, though a Trust is a more expensive course, it is suitable fare for more than just the wealthy.

For additional information about estate planning or advantages of a Trust, contact the Goosmann Trust Law Counsel at info@goosmannlaw.com or call 712-226-4000.