Our firm will usually be asked, by virtually every client, on what a trust is? Usually, most clients have the perception that trusts are only for the wealthy and those with millions of dollars in assets. However, this is a very common misconception. Trusts are not just for the wealthy, but are a very important estate planning tool that can be used to protect your assets and prevent airing out your final affairs in the public court system after you die.
Now, there are numerous types of trusts. There are Revocable Living Trusts, Irrevocable Trusts, Medicaid Planning Trusts, Life Insurance Trusts, Asset Protection Trusts, Tax Planning Trusts, and even Pet Planning Trusts. A trust document can be used to accomplish nearly every estate planning legal goal that you may have.
The most common trust is the Revocable Living Trust, and this type of trust is primarily used as a probate avoidance tool. As I continue to address in previous and in future blog articles to come, probate is public, expensive, and difficult for the surviving family members. Any time you have assets in your name when you die, your surviving family members will be required to open a probate estate with the court and obtain court permission before they are authorized to access the assets that you left behind. In addition, this occurs after all the valid debts, taxes, and estate settlement costs have been paid.
However, with a Revocable Living Trust, and ensuring that all of your assets are properly titled in the name of the trust when you die, no probate proceeding will be required, and your family members will continue to have access to all of the assets after your death. In addition, and most importantly, your assets will not be reduced by all of the estate settlement and probate costs before those assets are distributed to your loved ones. You worked hard and saved your money all of your life so that you could leave an inheritance for your children. The last thing you would want would be to have your children’s inheritance reduced because of probate and estate settlement costs.
If you have questions regarding Trusts and whether a Trust would be the best plan for your specific situation, then I encourage you to attend one of our many free events that we hold throughout the greater Nashville area each and every month. I am convinced that you will walk away from our events having most, if not all, of your questions answered.