You probably know the importance of having a will in your estate plan, but did you know that trusts are usually more beneficial? While you can choose to have both legal documents, trusts offer some additional protections that you may appreciate.
Here are three of the reasons why you should consider opting for a trust over a will.
- Your trust helps you avoid probate
The first reason to go with a trust over a will is that the assets in the trust completely avoid probate. A revocable living trust doesn’t require probate, because the assets in the trust don’t belong to you. Instead, they are held by the trust and passed on to beneficiaries when you die. This bypasses the tedious probate process.
- Trusts can reduce your tax liability
Another great reason to go with a trust instead of a will is the opportunity to reduce your tax liability. Since items in a trust are taken out of your possession, they aren’t taxed as part of your estate. The same is not true of items listed in your will.
Additionally, depending on the kind of trust you choose, you may be able to protect your assets against creditors and collections if you have debts when you pass away. An irrevocable trust, for example, protects your assets from taxation and collections.
- You can maintain your privacy better with a trust
The next reason to consider a trust is because it’s more private. When you have a will, it goes into public record when it’s submitted to your local court. A trust doesn’t work that way. Instead, only your beneficiaries will see what’s in the trust, which allows you to maintain privacy around the assets you’ve passed on.
Do you need both a will and trust?
Wills and trusts are similar, but they aren’t exactly the same. It’s possible that you could need a will as well as one or more trusts. If you’re interested, your attorney can talk to you about the benefits of trusts and if your estate would benefit from having a will in it as well.