Trusts are a great way to help plan your estate and to help your assets avoid probate at the end of your lifetime. Setting up a trust and transferring assets to the entity means that you are no longer the legal owner of the contents. A trust always has a beneficiary, the entity in which the contents of the trust will eventually benefit, and a trustee, a third party that holds the legal title to the property while it is in the trust.
Living trusts are created by a person during their lifetime rather than at their death. Setting up a living trust could benefit your estate in many ways and could allow you greater control over your assets. The following is an overview of the main benefits of living trusts.
Since any assets than you put into a trust are no longer yours legally, you may be able to strategically plan so that you can avoid taxes. For example, by transferring assets that you would otherwise owe capital gains tax on, you can legally avoid such taxes.
When assets go through probate at the end of a person’s life, they become public records. Obviously, this is not an ideal situation for a person that values privacy. Assets that are transferred to trusts avoid probate, and therefore, information about the trust does not become public. Avoiding probate also has many financial advantages since the probate process is particularly costly.
If you are interested in the introduction of trusts as part of your estate plan, you should take action to understand more about how they could facilitate your objectives.