You may know that trusts are a thing that people can use in estate planning, but if you have a smaller income you may not have ever considered having one yourself. While your basic estate plan might begin with your will, considering a trust is something you should do.
Trusts are protective fiduciary arrangements that go over how you want to distribute your assets. In many cases, trusts help your family avoid probate court following your death, so your assets may be passed on without probate court involvement.
Trusts come in all different forms, so you may benefit from one that protects your pet or one that minimizes estate taxes. Though they can be expensive, many trusts are reasonably priced and offer protections that your will cannot.
Your trust allows you to be highly specific about your wishes
One reason to consider a trust is because it allows you to be extremely specific about how you pass on your assets. Even if you don’t have a high income, you may have a property that you want to pass on or life insurance that you want to send to your children or grandchildren. Your trust can be designed to both protect and pass on your assets, so there is less to worry about.
Your trust allows you to be more specific than a will would. So, you can state exactly when the trust pays out. For example, you might state that the home you’re passing on can go to your children but that they cannot sell it for 10 years. You might place your life insurance into a trust to pay out a specific amount annually instead of having it all be distributed upon your death.
Trusts have a reputation for being for the wealthy, but anyone planning for the future can reap their benefits. You may be surprised by how affordable they are, especially when considering their benefits.
With the right kind of trust, it is possible to protect yourself and your beneficiaries, to minimize the taxation of your property and to be sure that your assets are not spent down too quickly in the future.