When you bequeath loved ones part of your estate through a will, they will be the legally recognized owners of the said assets and property. Therefore, they can sell them off if they wish. Creditors can also repossess them for a debt owed.
To protect your estate from such eventualities, there are other ways of handling things. One of them is by including a trust in your estate planning. Here is how it works.
Setting up a trust
A trust is a legal arrangement where a third party (the trustee) manages assets on behalf of one or several beneficiaries. When you establish a trust and fund it, the assets in it will legally belong to the trust, not to the beneficiaries. Therefore, while your loved ones will still enjoy proceeds from the trust, it shields assets from exchanging hands by offering some legal protections.
The trustee is legally obligated to always act in the best interest of the trust and beneficiaries. In addition, as the person who created the trust (the grantor) you get to dictate the terms and conditions. You can specify what goes to who and what happens to the trust in the long run.
The best part is that there is always the right kind of trust for your estate planning needs depending on your end objectives.
Learn more about how trusts work
A trust is perhaps the best way to quiet your worries about the future of the family fortune. When done right, you can rest assured that everything will run smoothly when you are gone, unlike the uncertainty that comes with having everything in a will.
However, like any other estate planning tool, you must ensure the legality of everything you do when setting up the trust, such as property transfers. Otherwise, everything may be thrown in disarray and the trust may end up not accomplishing your goals.