What Are The Benefits And Drawbacks Of Establishing A Trust?
Trusts are legal documents that allow individuals, known as grantors, to transfer property into a trust. During their lifetime, grantors can control and use the property in the trust. They name a successor trustee to manage the trust after they pass away. Many people choose to include a trust in their estate plan because they do have many benefits. However, they do also have some drawbacks. If you are considering establishing a trust, it is important that you know what these are. Below, our Daytona Beach trusts lawyer explains more.
What are the Advantages of Establishing a Trust?
Again, trusts have many benefits that can make estate planning more effective and more efficient. Some of the biggest advantages of establishing a trust are as follows:
- Avoid probate: The property in a properly funded trust is not subject to the probate process because these legal documents are separate legal entities from estates. Probate can be very time-consuming and avoiding the process allows your heirs to receive the property you left for them right away.
- Confidentiality: Wills become part of public record, meaning anyone can look up the terms if they want to. The terms of a trust, on the other hand, remain private so personal details are kept confidential.
- Better control over property distribution: It is possible to include provisions in a trust that dictate how you want the property distributed. For example, if you are worried about a beneficiary wasting their inheritance, you can include a spendthrift provision that distributes the funds over a certain period of time.
- Protection from creditors: Certain types of trusts, such as irrevocable trusts, can protect your property from being seized by creditors to repay debt.
What are the Drawbacks of Establishing a Trust?
Although trusts do have a number of benefits, they do also have some drawbacks. These include:
- More costly: Trusts are more complicated to set up than traditional wills and so, they have more upfront costs. Maintaining a trust can also incur ongoing costs not associated with wills.
- Continued maintenance: Simply establishing a trust is not enough. You must also properly fund them, and the property within may require regular updating, which can require ongoing oversight.
- Choosing a trustee: Choosing a successor trustee is not necessarily a drawback, as this is a requirement for all trusts. However, if you do not choose the right person, they may mismanage the property within a trust and not act in the best interests of your beneficiaries.
Call Our Trusts Lawyer in Daytona Beach Today
Trusts are valuable legal tools that can protect your property and ensure the transfer to your beneficiaries is a smooth one. At Bundza & Rodriguez, our Daytona Beach trusts lawyer can provide the legal guidance you need to help you create a trust that aligns with your wishes and all of your estate planning needs. If you need help establishing a trust or reviewing an existing estate plan call us today at 386-252-5170 or chat with us online to request a consultation with our experienced attorney.
Source:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736.html
