Estate planning can be complex. It is often helpful to work with a trusted estate planning attorney to learn more about the process and strategize about different options, such as trust-based plans. These are dynamic solutions to asset management that offer probate avoidance and may be a better choice than will-based strategies for some.
It is essential to understand trust-based estate planning to select the option that best suits one’s financial goals and needs.
Understanding Trust-Based Estate Plans
The defining factor in trust-based estate plans is the creation of a trust that manages someone’s assets throughout their lifetime and distributes them to beneficiaries after their death. These plans bypass the probate process, which typically validates a will in court and permits an executor to distribute assets. By bypassing the probate court, this estate management process may be more efficient and offer beneficiaries greater privacy.
A trust-based plan enables individuals to manage their assets and plan for future provisions such as care for disabled dependents.
These plans stipulate either a revocable living trust or an irrevocable trust. Irrevocable trusts are set plans with little room for adjustments. The revocable plan is more flexible, allowing the grantor (estate holder) to modify estate terms throughout their life.
The Benefits of a Trust-Based Estate Plan
Trust-based plans are beneficial for many people but may be the most advantageous choice for those with substantial assets, complicated family dynamics, disabled dependents, or specific visions for trust administration. These plans offer financial advantages, such as minimized estate taxes, and can allow beneficiaries to avoid the delays associated with the probate period.
These plans tend to offer a more precise, customized distribution of assets due to the appointment of trustees and the specific terms set out during the grantor’s lifetime. Trust-based plans offer more control over the details of succession planning and may make more sense than wills for anyone seeking continuity with large real estate holdings. The enhanced privacy of a trust-based plan is also a significant benefit for those concerned with confidentiality, such as public figures or high-net-worth individuals.
These plans also allow for the nomination of guardianships for beneficiaries, providing an immediate plan for the transfer of caring responsibilities. Compared to a will-based plan, a trust-based plan avoids the probate process, that takes longer to process and leaves children in a slower transition period, with court appearances typically required.
In addition, a trust-based plan allows for disability planning that avoids the need for conservatorships. A conservatorship is like a living probate. A conservator must be appointed by a court and then seek court approval for the duration of the conservatorship. In contrast, a trust-based plan may provide for disability trustees who can take the needed action without obtaining court approval.
Who Is Involved in a Trust-Based Estate Plan?
Those interested in a trust-based plan should understand the parties involved.
– Grantor: The person who creates the trust and defines its terms is known as the grantor.
– Trustee: The grantor will nominate an impartial party to distribute assets per their wishes. Trustee duties include financial responsibilities and demand reliability and objectivity.
– Beneficiaries: Those the grantor chooses to receive benefits from the trust; for instance, one’s children or charity foundations.
In addition to these parties named in the plan, grantors may benefit from working with a qualified estate planning attorney who can ensure the plan is legally sound and will preserve their wishes as intended.
Work With The Ebbert Law Firm To Develop Your Estate Plan
Trust-based estate planning can be more beneficial than a traditional will for some people, and working with an attorney can make it easier to determine whether this style of asset management is best for you.
The Ebbert Law Firm provides comprehensive legal counsel to individuals planning their estates. Whether you intend to file a traditional will or want to discuss more flexible and customizable options, such as a trust-based estate plan, our attorneys can assist.
To learn more about trust-based estate planning, consult us by calling 865-229-8509.