Planning for the future is a process that is personal and specific to the individual creating the plan. If you are strategizing about the specific tools you need to include in your estate plan, you are likely starting by drafting a will. This is a document that outlines what will happen to your personal property after you pass, and it can allow you to name a guardian for your minor children. However, you might need additional steps to have the full amount of protection you need.
In addition to your will and medical planning documents, you may also benefit from establishing a trust. This is a step that will allow you to accomplish specific goals for your wealth and property after you pass away. Many people assume that trusts are only for individuals who have a significant amount of wealth, but that is not the case. Many average individuals benefit from the protections and control provided by a trust.
Understanding how a trust works
A trust is a legal arrangement that will be between you, the trustee and the beneficiary. When you establish a trust, you will name a certain person to oversee the assets held in the trust. This is the trustee, and it should be a person or party that you trust will act responsibly and in the best interests of the beneficiary of the trust. You can accomplish a range of different goals with your trust, from giving to charity to setting aside money for a minor heir.
There are benefits to passing wealth through a trust versus directly to an heir through your will. Assets held in a trust do not have to go through probate. You are to use them for their intended purpose, and there are different types of trusts that will allow you to accomplish a specific goal that you have. A trust can provide tax benefits, asset protection and privacy.
A complete estate plan
You will benefit from having a complete estate plan in place. If you do not have a trust as part of your plan, you may find it helpful to seek an understanding of your options, starting with an assessment of your case, analysis of your estate goals and other factors that are unique to your situation. As the future is unpredictable, you will benefit from taking these steps as soon as possible.