Your assets are a product of your life’s work, so it’s natural to want to protect them. After all, when you’ve accumulated resources like real estate or have copious cash in your name, you need to ensure that they pass on to the best rightful owner, so they’re not wasted. But how do you do this? The only way you can guarantee the safety of your assets is by looking into Wills and Trusts. The legal system is here to help, and unless you invoke it on time, you’ll be at a loss.
Drafting a Will or a trust is the secure method of keeping your legacy alive, rightfully transferring your assets, and ensuring the people you wish to help benefit from your wealth. Furthermore, you can start a will or set up a trust at any age, so why not handle the grunt work as early as possible? If you’re curious about the advantages you’ll reap from staying on top of these processes, here’s what you need to know:
What Is A Will and A Trust?
A will is a legal document that protects your assets by naming their inheritor and how the appointed executor will distribute them. At the same time, this document is also necessary in naming a guardian who will look after your minor children and pets in case of your demise.
On the other hand, a trust is another legal entity that allows you to authorize a third party to manage your assets until your beneficiary is ready to take over. Both methods aim to achieve the same purpose: to help you maintain your assets. If you wish to create a will and trust, the best tip is to hire a lawyer to guide you.
Several online platforms have made setting up a will and a trust way more straightforward and recognized by your state. You can arrange for a will and a trust for an affordable price with minimal hassle.
What Are The Benefits Of A Will and A Trust?
One of the biggest perks of having both these entities in effect is having complete control over your assets. You get to decide how your resources will get managed without leaving them at the state’s mercy or getting unfairly divided between your loved ones. Whether you want your children to access their college funds at eighteen, want your estate to go to your adopted children, or wish to donate money to a charity of your choosing, a will and trust can make it happen. There are other advantages of these two processes, and their details are as follows:
- Skip Out The Probation Process
When you pass away, unless you have an effective trust or will, your estate and assets will go through probation. This allows creditors and the public to access your records and decide if all your debts get paid off and how much tax should be charged on each of your assets. Since your family will be dealing with the probate process after your demise, this can put them at a financial disadvantage. Your loved ones may have to pay as little as 3% to 8% of the total before they can access your assets. They may also have to settle additional estate and income taxes, which is another blow to their savings.
However, if your assets are in a trust or gifted through a will, you save them from going through the probate process. While a minimal fee is required while dealing with a will and a trust, it is nothing compared to the thousands of dollars your family would have to pay otherwise.
- Reduces Taxes
Wills and trusts allow you to gift your possessions. While the state laws may differ, you can provide up to $14,000 of tax-free gifts to your heirs per recipient. You can also make a joint tax-free gift of $24,000 with your partner to a single recipient. This means you can give your children up to $48,000 worth of tax-free hits for them to enjoy. If your estate is a part of your trust fund, you can skip out on estate taxes and may only need to pay a minimal amount on your property.
- Protects Your Family
These two legal processes can keep your family safe. A trust fund and will can give you the power to decide who gets to access your assets and what will happen to your children in your absence. You can pick out who gets to raise your child. As a result, you get to protect your legacy and also provide your family with resources to look after themselves. This can save them from sinking into a financial limbo and shield your children from going into foster care or living with a state-appointed guardian.
- Greater Flexibility
A will gives you complete autonomy over your life. You get to decide how you wish for your funeral to get carried out and deal with all matters related to your assets. You also have the right to exclude relatives from the inheritance you’re leaving behind and ensure they cannot use legal loopholes to steal your funds. On the other hand, revocable trust funds give you leeway to add and subtract clauses until you’re ready to make your final decision. These prevent you from making hasty decisions and let you think carefully as you work on your assets.
It would help if you looked into having a will and a trust settled under your name. There is no reason to wait since you can amend these legal documents as often as you like until they’re ready to go into effect. A will and trust can provide your assets with a barrier against state interaction and unfair division. Once you successfully create a will and a trust, your family can enjoy many benefits, such as exclusion from probation taxes, reduced state taxes, and access to your funds on time. This method is the only way you can freely and liberally decide how to deal with your assets legally.