Why You Should Add a Trust to Your Estate Planning Portfolio
When you’re conducting your estate planning, you’d want to make the transfer of assets to your heirs more seamless and efficient. And one way you can do this is by establishing a trust fund. A trust is essentially a legal relationship in which property and assets are held by an entity for the benefit of the trustee. And adding a trust fund to your estate planning portfolio can be a great idea in many ways.
You Can Avoid the Probate Process
If you’re planning to leave some assets to your heirs, then you want the transfer process to be efficient and smooth. You’ll want the process to be as painless as possible to prevent any legal and financial hassles. With such a desire in mind, adding a trust fund to your estate planning portfolio can help.
A trust can be used to avoid the probate process. Probate is a contentious process that you don’t want to go through if you can help it. To avoid probate, you can place your assets into a trust. Once your trust is in place, beneficiaries can receive the trust assets by accessing them without going through the probate process.
You Can Set the Terms of a Trust
Another reason trusts can be good to have in estate planning is that the terms of a trust can be set by you. For example, you can set when trust assets are released to beneficiaries. You can also set how your beneficiaries are restricted from accessing these trust assets.
You can also set how trust assets are distributed among your beneficiaries. If you don’t want to leave everything to one beneficiary, you can set how the trust assets are divided among your beneficiaries.
You Can Protect the Assets from Debts of the Trustee or Beneficiary
Another reason to add a trust to your estate planning portfolio is that a trust can protect your assets. A trust can help protect your assets from the debts of the trustee or beneficiary. This is because a trust is a separate entity that separates the assets of the trustee and beneficiary. Thus, the assets will be safe from the claimant’s rights of the trustee or beneficiary.
You Can Name a Backup Trustee
You can also add a trust fund to your estate planning portfolio to name a backup trustee. A backup trustee can be designated to take over the responsibilities of the trustee in case the original trustee is unable to do so. You can also name a backup beneficiary to receive the trust assets in case of the death of the original beneficiary.
You Can Save Taxes
You can also benefit from adding a trust fund to your estate planning portfolio because trusts can help you save taxes. You can do this by using a trust to save estate tax or the tax you pay on the property after you pass on. You can also use a trust to save income tax.
When your assets are in a trust, they’ll be protected from the beneficiaries, and you can use the trust assets to support the beneficiaries. This can help you save income tax because the income of the trust is taxed at a rate lower than that of the beneficiaries. The trust itself can also be a beneficiary of an income tax deduction.
To sum up, trusts can be good to have in your estate planning portfolio. If you want to withdraw your assets but still provide support to your beneficiaries, then adding a trust can help. You can use a trust fund to make the transfer of your assets to your heirs seamless and efficient. You can also use trusts to avoid the probate process, set the terms of the trust, protect your assets from the debts of the trustee or beneficiary, name a backup trustee, save taxes, and provide support to your beneficiaries.
Add a trust fund to your estate planning portfolio with the help of Estate Planning Lawyers Colorado. We are an estate planning attorney in Colorado who can handle all your estate planning needs, including wills, trusts, probate, and legacy planning. We aim to help you create a thoughtful and comprehensive estate plan concerning what happens to you and your family if you’re incapacitated and when you pass away. Schedule a consultation today!