Many people can benefit by having a trust put in place prior to their death or incapacitation. However, many of these people don't understand the benefits of a trust due to the many myths surrounding these legal agreements. Whether you have a large estate or a smaller estate, the following tips will help you decide whether you really need a trust, or whether you can allow your heirs to make decisions regarding the legal assets you leave behind.
Myth #1: A trust is only necessary if you are leaving a substantial amount of assets behind.
This myth is definitely incorrect. While trusts are very helpful for those who are leaving considerable assets to their heirs, trusts are not just beneficial for those of great means. A trust can ensure that your assets are utilized by your heirs in a way that will benefit them, and not just spent on random shopping sprees or vacations. Establishing a trust to distribute your assets can also help your heirs avoid the probate process after your death, which can cut down on stress levels and legal fees.
Myth #2: A trust is only needed when there is a possibility of contentious relationships between your heirs.
Establishing a trust prior to your death will cut down on squabbles between your heirs. All of your assets will be contained in the trust and controlled by a trustee. There is still a chance that your heirs can drag your estate and the trust through the court system after you are gone, but that is less likely to happen than if you passed away with all of your assets outside a trust. Putting a trust in place will also lessen the chances that your heirs can contest your entire will and tie everything up in court for years after you are gone.
Myth #3: Trusts are only useful or necessary after death.
This is also incorrect. While most trusts aren't needed until after the death of the person that set up the trust, they can still be useful prior to that individual's death. If you become incapacitated due to an accident, illness or health condition, a trust will ensure that your financial needs are taken care of for you. This means that your medical care will be covered and no one can swoop in and clean out your bank accounts. Having a trust in place before a life-altering event will ensure that you are taken care of for the duration of your life, and then your heirs will be taken care of after you are gone. Contact a lawyer, such as from Donald B Linsky & Associate Pa, for more information.