As someone who is trying to determine the best way to preserve your wealth for future generations, you may be weighing your estate planning options and trying to figure out your best course of action. While you have numerous estate planning options at your disposal, one method you may want to consider using if you wish to leave as much behind to your loved ones as possible involves establishing a trust.
While trusts come in a variety of different forms, many trusts offer the same, or very similar, benefits. Just what are some of the advantages of creating trusts, and why might you want to consider doing so?
When you establish a trust, it can lead to substantial tax savings for your loved ones after your passing. How? The assets you leave in a trust do not come into play when determining estate taxes, and this means your loved one’s tax obligations will be far lower than they would be had you placed your assets in a traditional will. In other words, your loved ones get to keep more of your hard-earned money.
Possible protection against creditors and lawsuits
Placing your assets in a trust can also safeguard them in the event that someone sues or files some type of judgment against you. Typically, the assets in the trust become untouchable, so this can prove to be a risk-free method of preserving your wealth.
Faster beneficiary distributions
By creating a trust, you may also be able to help your beneficiaries secure what you left to them more quickly than you could otherwise. Why? Assets you leave your loved ones in a trust do not have to go through the probate process, which can prove time-consuming.
While different types of trusts offer different benefits, these are some of the main advantages that come with establishing this type of fiduciary arrangement.