When you think of estate planning, your thoughts probably jump to creating a will and a health care directive. While these documents are vital to any estate plan, a truly comprehensive plan should involve other potential tools, such as establishing a trust.
Many people view trusts as something that only benefits the rich. However, a trust can be useful regardless of your income level. Here are three reasons you might want to consider making a trust part of your estate plan.
1. You can keep the details of your estate private
Privacy is important to a lot of people. A trust can keep the details of your estate hidden from public view. Assets that are placed in a trust do not have to go through probate. As a result, those assets and your plans for distributing the contents of a trust will not become part of the public record.
2. You can help shield your estate from tax liability
Various taxes can significantly reduce the value of your estate, leaving your loved ones with significantly less than you may have intended. If you have assets worth a significant amount, such as a vacation home or a business, setting aside those assets in a trust can help reduce tax liabilities.
3. You can ensure a loved one receives the care they need
Whether one is eligible to receive disability benefits depends on their income. These income requirements are strict. If you have a loved one receiving disability benefits, the receipt of even a modest inheritance could render them ineligible. Any assets that pass through a trust will not count against the recipient’s income, enabling your loved one to retain their much-needed benefits.
A trust is but one estate planning tool. You can employ other methods to help you achieve your goals. You should work closely with a skilled legal professional to put together the estate plan that will best suit your needs.