If you’re busy working on your estate planning, you may be looking for the most effective way to manage your assets. In addition to drawing up a comprehensive last will, you may also have been advised to consider creating a trust.
The easiest way to do this is to enlist the services of the will and estate lawyers commonly used by Australians as part of their estate planning. These experts will advise you of the best options for effectively setting up a will and a trust. This post takes a closer look at what a trust is and how it will benefit you.
Understanding What a Trust is
In short, a trust is a legal entity where a specially appointed Trustee manages your assets for beneficiaries that you have nominated. A Trust is typically set up by a grantor who transfers the determined settlement sum or property into the Trust.
For the most part, a Trust is created as part of estate planning. Your wills and estate attorney will ensure that assets are distributed according to your wishes, which goes a long way toward avoiding any lengthy probate processes. Trusts enable you to split your assets between all your beneficiaries and have been labelled as an effective way to house complex assets.
Many Benefits to Consider
There are many benefits to establishing a trust fund as part of your estate planning process. Our team of legal experts has compiled a list of these to help you get started.
- You Have Control Over Asset Distribution
One of the top reasons why many Australians are opting to establish a trust is that it gives the individual detailed control over the way they want their assets distributed. This means that you, as the grantor, can list exactly how much of your assets should be distributed to each of your beneficiaries.
Trust funds are especially beneficial to young children who will be unable to receive or manage assets if you pass away while they’re still underage. A trust will keep the assets secure until they are old enough to receive them.
Opting for this ensures that the children can’t be taken advantage of by other family members. You can also set up a trust for children or relatives with special needs as a way to provide for their care.
- Trusts Protect Against Legal Disputes
Another worthwhile benefit of setting up a trust is that it protects the beneficiary against Will changes or unexpected legal disputes. This is because a trust features more detail than a Will and may also contain detailed documents drawn up by the grantor.
Doing this is meant to show clear intent as well as mental capacity and prevents family members from being able to question the individual’s state of mind at the time of creating the trust. Involving a wills and estate lawyer is the perfect way to ensure that this process complies with legal requirements, thereby avoiding potential queries about the legality of the document.
- There’s no Hassle With Probate
One of the more significant benefits of setting up a trust is the avoidance of the probate process. During probate, the deceased person’s Will has to be validated. This process can often be time-consuming and can involve significant costs that the beneficiaries are responsible for.
A little-known fact is that a trust fund bypasses this whole process because when assets are placed in a trust, they are no longer part of the individual’s estate. This means that any assets in a trust are transferred to the beneficiaries quickly. The overall costs involved in finalising are also significantly lower.
- There are Considerable Tax Advantages
Opting to create a trust also provides significant tax advantages. This happens because assets that have been removed from the Will and placed into the trust are no longer subject to the regular estate taxes that your beneficiaries would be responsible for. Speak to your wills and estate lawyer for additional ways that your beneficiaries can benefit from other advantages.
- Flexibility to Change When Needed
As the grantor, you will always have the flexibility to change the beneficiaries and their allocated shares of your assets. Factors that may influence the changes you may need to make include marriage, birth of children, divorce, death of beneficiaries, and changes in your financial status. This level of flexibility ensures that your Trust remains aligned with your wishes at all times.
Final Thoughts
Our experts always recommend reaching out to a wills and estate lawyer for all your estate planning needs. They will not only guide you through the whole process but will also help you set up the necessary trust fund for your beneficiaries.
By opting to set up a trust fund, you can look forward to benefits such as long-term property management, privacy during the creation process, tax advantages, as well as the avoidance of a drawn-out probate process. Setting up a trust fund will give you peace of mind that your assets will be distributed the way you need them to be when you’re no longer around.
Lynn Martelli is an editor at Readability. She received her MFA in Creative Writing from Antioch University and has worked as an editor for over 10 years. Lynn has edited a wide variety of books, including fiction, non-fiction, memoirs, and more. In her free time, Lynn enjoys reading, writing, and spending time with her family and friends.
