There are many reasons to establish a trust when planning your will, especially if you have young children and a large fortune. Trusts help reduce the amount of estate tax that your children or other beneficiaries will have to pay when they receive their money. Family and Aging Law Center, PLLC, lists what you need to know about trusts.
The best thing you can do is contact an estate planning attorney to set up trusts for your beneficiaries. This will ensure that everything is done correctly.
Your accountant, bank, or financial planner can recommend estate planning attorneys for you.
There are two main types of trusts. The first type is the testamentary or death trust. This is part of your will, so it does not come into being until after your death. It ensures that someone can’t take control of your money, even your beneficiaries, if you become physically or mentally incapacitated. Your beneficiaries still need to go through the probate process.
The second type is a living trust, which exists while you are still alive. It can shift control of your money to your beneficiaries if you become physically or mentally disabled. If properly funded, it can avoid probate entirely, even after your death.