You may know how important it is to have a will, but sometimes, you want to accomplish certain things during estate planning that a will is unable to do. A trust is a type of estate planning tool that involves you relinquishing control over the assets inside of it to a trustee. Different types of trusts exist, and they may be able to help you accomplish a number of important tasks.
You may want to use a trust to do any of the following.
When you leave assets to someone in a will, those assets have to go through probate, which is the process involved in proving the will. This leads to delays in terms of when beneficiaries get their hands on what you leave them. Assets you place into a trust do not have to go through probate.
Protect assets from creditors
When you enter assets into a trust, you also protect them if a creditor comes after you. Technically, those assets belong to the trustee, not you, so they remain untouched.
Protect public benefits eligibility
If you have a loved one who uses public assistance due to a disability or something else, he or she may have to go through means-testing to receive them. Leaving assets in a traditional will may make your loved one ineligible to receive them anymore. However, a trust gives you a way around this.
Trusts come in many forms, and the form that may serve you most favorably is going to depend on your estate planning objectives.