What is a Trust? Do I Need One?
A trust is a fiduciary agreement that outlines how your assets will be distributed after you pass. In a trust, you specify who will have the authority to handle and distribute your assets to your beneficiaries. Although trusts sound similar to wills, trusts offer specific financial benefits and are solely for handling your assets. If you would like to learn more about wills, please read our last blog post here.
People often misunderstand trusts because of the media’s misrepresentation of them as something only the extremely wealthy have. Movies and TV shows frequently label rich kids as “trust fund” babies, riding off the coattails of their wealthy heirs. Yes, trusts are very useful to wealthy individuals, but they are also useful for anyone with assets.
One of the many benefits of a trust is that your assets can be distributed without the involvement of a probate court. Probate courts oversee the distribution of assets to ensure that all the deceased person’s creditors and debts are paid. Probate is a public and often lengthy process.
Trusts are also useful to:
- Minimize taxes on your estate
- Preserve money for loved ones, until they reach the age of 18
- Plan finances for disabled or special needs loved ones
- Manage the succession plan of a business
- Transfer property
- Give money to charity
The bottom line is, a trust can give you more control and privacy over your assets so you can be assured your loved ones are taken care of after you pass away.
To learn more about how a trust can benefit you, contact us at staff@pathfinderlawgroup.com or 410-296-6777. We would be happy to assist you and answer your questions.