The Importance of Trusts: Safeguarding Your Assets for Future Generations
At Inhulsen Law, we know that planning for the future is more than just protecting what you’ve worked hard to build—it’s also about making sure your loved ones are taken care of after you’re gone.
One of the best ways to secure your assets and ensure they’re passed on according to your wishes is through a trust. Trusts play an important role in estate planning, helping to safeguard your wealth for future generations while giving you peace of mind.
Let’s explore what trusts are, the different types available, and how they can benefit you and your family. By taking the time to set up a trust now, you can save your loved ones from unnecessary stress and confusion down the road.
What is a Trust?
A trust is a legal arrangement where one person (the “grantor”) gives another person or institution (the “trustee”) the responsibility to manage assets for the benefit of a third party (the “beneficiary”). This allows greater control over how your assets are distributed during your lifetime and after.
The trust can be funded in various ways—whether through life insurance policies, real estate, or bank accounts. Once the trust is set up, the trustee oversees the assets, ensuring they’re handled according to your specific instructions.
Types of Trusts
When it comes to trusts, there are a few key types you may want to consider, each offering its own unique benefits:
Revocable Trusts
A revocable trust is flexible, allowing you to make changes or even dissolve it during your lifetime. This type of trust is popular because it gives you control over your assets while still living, and can be easily adjusted as circumstances change.
However, while the flexibility is beneficial, it doesn’t provide as much protection from creditors as other types of trusts might.
Irrevocable Trusts
In contrast, an irrevocable trust cannot be changed once established. While this may sound limiting, irrevocable trusts offer greater asset protection and tax benefits.
By transferring ownership of assets to an irrevocable trust, you remove them from your taxable estate, which can help minimize estate taxes and protect your assets from creditors.
Other Trusts
Depending on your situation, other types of trusts might be appropriate. For instance, special needs trusts can provide for a loved one with disabilities without affecting their government benefits. Charitable trusts can be used to support causes you care about and reduce tax liability.
Benefits of Trusts
Now that we’ve covered what trusts are and the types available, let’s take a closer look at the benefits they offer.
Avoiding Probate
One of the biggest advantages of setting up a trust is that it helps you avoid probate. Probate is the legal process that occurs after someone dies, and it can be lengthy, stressful, and expensive.
On the other hand, a trust helps your assets pass directly to your beneficiaries without having to go through probate, saving them time, money, and potential headaches.
Asset Protection
Trusts can also help shield your assets from creditors or lawsuits. This is especially true for irrevocable trusts, since establishing means you no longer technically own your assets. By protecting your assets, a trust ensures that what you’ve worked hard to build isn’t lost.
Control Over Assets
With a trust, you maintain control over how and when your assets are distributed, even after you’re gone. You can set conditions for when and how your beneficiaries receive their inheritance, such as distributing assets in stages or waiting until a beneficiary reaches a certain age. This ensures your assets are used in a way that aligns with your values and intentions.
Inhulsen Law: Your Trusted Partner in Estate Planning
Inhulsen Law is committed to helping you create a solid estate plan that you’re completely confident in. It’s true that Michigan laws are sometimes overwhelming, but we take a client-centered approach to ensure we guide you every step of the way through the process.
Our team takes the time to get to know you and your family, so we can offer personalized solutions that truly fit your needs. We are dedicated to helping you care for your loved one – let’s protect your assets and make sure they are distributed according to your wishes.
Please give us a call today at (616) 747-0000 to get started with your estate planning. You can also reach us by way of our simple contact form (you’ll be asked a handful of straightforward questions before reaching the personal information section). We’re looking forward to hearing from you soon!
