Having insurance allows us to have peace of mind while we live and enjoy our lives. Insurance is not the only that you can do this; trusts also protect ourselves and our families by promoting clarity, control, and family harmony
The Key Takeaways
- Many of us have some kind of financial stress, and trusts can help address that stress.
- Trusts are especially beneficial for business owners or those with a lot of assets.
- Trusts can give immediate peace of mind.
What Are Risks Related to Estate Planning?
The risks that estate planning addresses are life events that leads to incapacity or death. These events lead to probate, guardianships or conservatorships, you are in a vegetative state with no direction of what to do, tax liability, fights over your assets, beneficiaries getting too much too fast, the courts remaining involved in your estate for years, and other issues.
What You Need to Know
These risks can have permanent consequences for yourself and your loved ones, not just financially but with relationships.
Why Use Trusts for Your Broader Financial and Wealth Planning?
Although there are many different kinds of trusts, most people only need a revocable living trust. A revocable living trust can either own or be the beneficiary of all your assets, it avoids probate, is administered privately, provides for yourself and your loved ones if you are ever incapacitated, and it can pass on your assets in a responsible and individualized way over the course of years or decades. A trust maximizes your flexibility when you are alive and well as well after something wrong has happened.
To talk more about passing on your property, a will gives your property in lump sums. A trust continues to own your property for as long as you desire, possibly in perpetuity. Your trust contains directions that determines how and when your property is given to your beneficiaries. Think of how you parent your children, your values, morals, and priorities. A trust can encapsulate all these things and continue to pass them on and teach them to your children. A trust is an incredibly powerful tool.
What You Need to Know
Trusts offer you a wide range of options and benefits. Just as importantly, trusts are completely compatible with your different properties, whatever they may be.
Actions to Consider
- Get to know all the risks that confront you and your family, whether they be financial or estate planning risks.
- Communicate often with your financial advisor and estate planning attorney so you know what your options are and can make informed decisions.
- Write down what concerns you have about yourself and your loved ones’ finances.
- Compare what you stand to lose if you do nothing and the value you may receive through an estate plan.
- Compare the cost to set up an estate plan with the administration cost and tax liabilities if you do nothing.
- Consider the option of using life insurance with the trust as beneficiary as a way to pass on something to your descendants.
- If you own a business, research how a trust can protect your business and your wealth.
- Do not wait. Tomorrow is not guaranteed. A trust can provide you with benefits even while you are alive and well. The best thing to do is get an estate plan based on your current circumstances and then update your plan as life changes.