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4 benefits of establishing a trust

A trust isn't meant for just those with wealth or multiple assets. There are numerous benefits of establishing a trust for your family. Reviewing these benefits can help you decide if you want to have a trust.

The difference between a trust and a will

First, it's important to know the difference between a trust and a will. A will isn't valid until you die, whereas a trust can go into effect while you're still living. A will includes only property in your name, and a trust only includes assets transferred to the trust. Wills can state guardians and outline funeral arrangements, and trusts are useful in the event of incapacitation. For the most complete estate planning, create both a will and a trust with the help of an attorney to ensure thoroughness, accuracy and compliance to Florida state laws.

The benefits of a trust

The following are only a few of the many benefits of establishing a trust.

1. It eliminates the need for probate. A will goes through the probate process to establish validity or determine what happens to assets not specified in the will. This step isn't required for a trust, saving your family time and money and maintaining your privacy. Your beneficiaries will receive assets promptly and exactly as stated in the trust. A trust is not as easily contestable as a will and its detailed customization decreases family feuds.

2. It decides how and when to distribute assets. A trust offers more flexibility and control in the distribution of assets and is better suited for complex situations. Examples of instructions you can include are how much money to grant and how often, how beneficiaries can spend money or use property and whether the trust is revocable (you can amend it) or not. If the trustee doesn't follow your directions, there will be legal consequences.

3. It reduces the taxes owed. Property and money put into a trust allows for lowering or avoiding taxes . It does this by reducing the size of your estate so there is less of it to tax.

4. It provides protection from creditors. If you make an irrevocable trust, meaning one which you can't change later, creditors can't obtain your assets because you no longer own or control them. This ensures they go to your beneficiaries.

What a trust can do for you depends on your specific circumstances. Talk to an attorney to find out how establishing a trust can best benefit you and your loved ones.

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