As you get older, it is natural to start thinking about what will happen to your assets when you die. One of the most important estate planning tools you can use to dictate your wishes regarding your assets is a trust.
A trust allows you to transfer some of your assets to a trustee for stewardship on behalf of your loved ones (the beneficiaries). A trust offers a variety of benefits such as avoiding probate and minimizing estate taxes. However, before setting up a trust, it is important that you ask the following questions.
Who will manage the trust?
One of the most important decisions you need to make when creating your trust is the choice of a trustee. This is the person or entity that will be responsible for managing the assets you set aside on behalf of your trust’s beneficiaries. Naturally, you want a trustee that is up to the task.
What are your goals?
Without a clear goal, your estate can be riddled with problems you would least expect to deal with. With a clear goal, on the other hand, your trustee will better be able to follow your wishes.
With clear goals, you will also have an easier time choosing the right trust. For instance, if you are seeking to have some control over the assets you are placing in the trust, then it will help to set up a revocable trust. However, if you are hoping to avoid estate taxes, then an irrevocable trust may be your best option.
People include trusts in their estate plans for a variety of reasons. Find out how you can create a trust that will protect your future, assets and loved ones.