Having a will in place is a crucial part of the estate planning process. However, wills are limited in what they can achieve. If you only have a will established, your estate could be vulnerable after you are gone.
Implementing a trust along with your will is a great solution, in this case. Forbes explains a few of the things a trust can do for you, so you can rest assured that your estate – and your family – are fully protected after you are gone.
Provide more structure to inheritances
A will lists which assets you would like to go to which heirs. However, it does not allow you to structure how inheritances are handed out. If you have high-value assets, you may be concerned about providing them to heirs in one lump sum. With a trust, you can put stipulations on inheritances. For example, you can stipulate that you only want an heir to receive assets once they have reached a certain age. You can also put conditions on inheritances, like requesting an heir finish college before receiving your assets.
Reduce estate taxes
Having a high-value estate can also leave you vulnerable to estate taxes. A credit shelter trust ensures that your estate can be passed to your surviving spouse without being taxed, which saves a lot of money. These trusts can protect you against estate taxes at the federal and state level depending on how much your estate is worth.
Protect children from previous marriages
Blended families make estate planning much more difficult. If you own an account with a current spouse and you are concerned your spouse will not disperse assets to children from previous marriages, placing funds in a trust can help. That way you can rest assured that your children will receive the exact amount of assets you wish them to without dealing with any challenges.