Many people understand the necessity of creating a last will and testament
Fewer know the benefits of creating family trusts. Even fewer understand why it is both important and advantageous to use both of these end-of-life planning tools to pass along wealth and assets to beneficiaries. However, when you know what both of these structures do and why they work so well together, you'll understand why the best form of asset protection requires you to link family trusts and wills.
In many ways, trusts are superior to wills
Wills go through probate, which takes time and can make assets contained within public knowledge, potentially leading to claims and can be contested. Robbing intended beneficiaries of their rightful inheritance. There is no probate process associated with trusts - the items held in trust are already available to beneficiaries in a timely manner and the proceedings are not a matter of public record.
Trusts provide protection from business risks
In addition, trusts take assets out of the former owner's name during his or her lifetime. So when potential creditors come looking for repayment, the assets held in trust are not considered the personal property of the debtor, meaning creditors cannot touch them (provided the trust was created in a legal and ethical manner well before any creditor debts where established).
Trusts provide financial protection for those you love and care about
That said, there are limits to what can be done with trusts. There are certain items that can be placed in trusts and those that cannot. A family home trust, for example, provides an excellent means of ensuring that a primary residence is not subject to seizure as repayment for debts related to a failed business or other forms of debt. Ex-spouses, other children, and even the spouses of children cannot claim items held in trust for specific beneficiaries. Bank accounts, retirement accounts, certain business interests, vehicles, art, jewelry, and items of monetary value can also be placed in trust.
Use a will to sort out personal effects of little financial worth
However, items that have little or no monetary value cannot go into a trust structure. If you have family heirlooms or other items of no financial worth that you want to pass on to loved ones following your death because of their sentimental value, these items should be listed in your last will and testament. You also need a will to pass cash to named recipients. If you have cash that you want to pass through a trust structure, you can do so by placing it in bank accounts, CDs, or investments of some kind, which can then be placed in trust. But currency that is in your possession must be passed on via will.
How do you want to protect your lifestyle?
You'll have to decide how best to use these two structures when it comes to estate planning, but it's easy to see how the two work best when used in tandem.
So why not learn more and register with TrustUs today.
After all, it's in your hands.