Five Reasons Behind Will-based or Trust-based Estate Plans
Several reasons exist behind the need to set up either a will-based or a trust-based estate plan. Each of these reasons provides sound common sense on its own, but together, they form an irrefutable impetus to create an estate plan forthwith.
Protect Your Beneficiaries with a Will-based or Trust-based Estate Plan
The protection of the beneficiaries is ensured if a strong estate plan has been set in place. With a will-based estate plan, the last will and testament clearly defines the disbursement of the decedent’s assets in regard to the beneficiaries. While the primary benefit of creating an estate plan might be to protect the interests of minors, the interests of adult beneficiaries can also be protected.
In particular, each one of the fifty states has laws in place that are designed to protect the needs of a minor. Depending on the state, a minor is defined as an individual who has not yet reached the age of either eighteen or twenty-one. These laws require that an adult be appointed to oversee the needs of the minor in regard to any inheritance.
In general, the last will and testament or the trust agreement of a parent will name a guardian to oversee the financial matters of a minor child. Additionally, either one of these documents can also be designed to protect the financial needs of an adult beneficiary by setting up a trustee to manage the inheritance of this individual.
Protect the Assets with a Will-based or Trust-based Estate Plan
Although not everyone will see the need to put a strategy in place to protect their assets, some people will determine that it is better to be safe than sorry. In fact, the presence of a threat for a potential law suit is reason enough to set something in place to protect the assets of an estate. Not only can this type of planning protect estate assets for the beneficiaries of any estate plan, but also, it will protect the assets while the trustmaker is alive and well.
Avoid Probate with a Will-based or Trust-based Estate Plan
One of the most common reasons for creating an estate plan is to simply allow your beneficiaries to avoid probate. Unfortunately, the probate process can turn into a nightmare for those who have to go through it with countless weeks of struggling to get through the massive pile of forms and documentation. A strong estate plan readily sidesteps all of this mess.
Reduce Taxes with a Will-based or Trust-based Estate Plan
The payment of state and federal taxes can take quite a large chunk out of anyone’s estate. Therefore, it is a strong reason to create an estate plan in an effort to minimize the amount of state or federal tax that can be assessed against the assets. Even basic estate planning can help to eliminate estate tax or to reduce them at the very least.
Streamline the Process with a Will-based or Trust-based Estate Plan
Setting up a clear-cut estate plan, whether it is will-based or trust-based is a perfect method for avoiding family arguments and discord after the trustmaker dies. In fact, the entire process of distributing the assets of an estate is streamlined through the existence of a last will and testament or trust agreement.