The vast majority of people write a will during their lifetime. This will, when done right, is a legally recognized document that enables a person’s estate to be distributed according to their wishes. However, assets that are distributed according to the instructions set out in a will are subject to probate. This means that it will take a significant amount of time to process the assets, and the will may be subject to contest. The probate process is also a costly one, which means that a part of the estate will need to pay for probate rather than be distributed directly to beneficiaries.
This is why so many people have started to consider the use of trusts as part of their estate plan. Since trusts require the transferring of assets during the estate planner’s lifetime, the process of distributing assets is much more efficient. Trusts are also extremely customizable and can help you set the terms for an inheritance that suit the beneficiary’s individual circumstances. The following are some of the ways that it is possible to customize trusts to suit specific needs.
Qualified Terminable Interest Property (QTIP)
QTIPs make it possible for your children from a prior relationship to gain an inheritance, even when you have remarried. They provide for the living expenses of the surviving spouse and then distribute the remainder of the funds to your children when your spouse has passed away.
Creating trusts for young people
If you want your grandchildren to gain a significant inheritance, you may worry that they will be too young to receive a lump sum. Trusts can help you to manage the way that they will receive their inheritance. They may be able to gain it in the form of a staggered income, or they may gain it gradually after they turn 25.
Creating charitable trusts
Charitable trusts can be a great way to leave a legacy that you can be proud of. It can be possible to create charitable payments to an organization for a set number of years. After this time, the remainder of the trust will be split between your heirs.
If you are interested in the ways that trusts can help you to avoid probate and customize payments, you should take the time to learn more about your options.