If you’re an individual, drafting a will is essential to ensuring that your loved ones are cared for after your death. Trusts provide similar protection but also benefit from protection against creditors. Furthermore, it can help you learn the total value of your assets, ensure your family benefits financially, and saves you from paying additional taxes. However, less than 30% of Americans have a will or trust despite its importance.
When you have a will or trust in place, the state can reduce your taxes and protect those assets from being divided up. Plus, it will save everyone some trouble with inherit-related expenses.
While it is understandable that drafting a will or a trust is tedious and requires you to submit the relevant paperwork on time, you should not shy away from the process. Here are some advantages of getting your legal paperwork sorted:
- Subside the probate process
When you draft a will or set up a trust fund allows your family to access your assets without paying for additional probation costs. While a will needs to go through the verification process, the charge is minimal with a proper legal document. At the same time, if you set up a tax fund in your lifetime, it will get verified and probated before getting approved.
You can easily create a will and trust using online tools and meet with a suitable lawyer remotely. You will have no trouble sorting out the documents you need to submit through a legal expert’s guidance. This saves your family both money and time since unverified assets take several months before they can access your resources.
- It gives your family a semblance of security
Monetary stress is a source of anxiety for many families and even you. A will or a trust gives your family immense financial security. Even if you cohabited with your partner and did not marry them, you can still provide for your loved one. If you have young children, older parents, and dependents like a niece or nephew you are looking after, you can make sure they are taken care of.
These legal strategies also prevent the state from taking over your assets and dividing them haphazardly. So everything you worked for in your life can pass along to the rightful owners as you wish.
- Your assets get protected
An asset trust or a clause in your will can dictate the terms of your valuables. It allows you to prevent creditors from seizing your resources. It also prevents your property from getting split if you get divorced, face bankruptcy, or get used as collateral if you get sued.
Your attorney will best inform you about trust laws and how to draft asset protection in your will. These rules may differ by state and need specific documents such as your real estate paperwork to authenticate your ownership and the right to pass it on.
- It prevents your assets from getting misused
Even if you name a beneficiary, you still dictate the time and terms of usage. A beneficiary such as your child cannot access the principal amount that goes in their name when they feel like it. At the same time, the beneficiary cannot sell your assets ahead or lend them to their creditors. When drafting a will, you can appoint a trustee or an executor to monitor asset management and provide a minimal amount for usage.
You may also define how your asset can be used, such as allowing the beneficiary to use the money for educational purposes but not leisure spending. Even if your money gets passed on, it will still benefit everyone fairly without one individual hoarding the resources.
- Let a trustee manage your affairs
You can appoint a trustee to manage your financial assets if you are alive but highly unwell. This helps you take a step back without worrying about your resources getting wasted. Think of a standby trust as a form of legal assurance.
If you become sick, have a severe accident, or cannot manage your assets before they get passed on, a competent trustee can take over for you.
- Allows you to give gifts
Family heirlooms, ornaments, and jewelry can get taxed if you pass them along without a will. The IRS allows you to give gifts as long as they follow the set limitations. For instance, you can provide a cash gift of $15,000 tax-free.
Therefore, consider the limits for giving heritage gifts and pass them along to your family. However, assets that increase in value over time may get subjected to taxation. Without a legal document representing these assets, your family will have to pay a surplus amount for owning valuable resources. Still, the presence of a will can help bring down the cost of inheritance.
- Avoid estate tax
An irrevocable trust fund allows you to transfer your assets out of the estate and into the fund. Therefore, you no longer have to pay estate taxes since you have transferred ownership. However, before you sign an irrevocable trust fund, ensure you consult a lawyer. The paperwork cannot get reviewed once you submit it. The process is often daunting and costly if you have any amendments to make.
It would help if you considered setting up a will or a trust at some point in your life. This allows your assets to trickle down to their new rightful owners without the state interfering. Your assets are valuable. These can financially benefit anyone you wish to help. It is also an excellent way to leave behind a legacy for your family. A will or a trust helps your family avoid probate taxes, gives them a semblance of security, and protects your resources from getting used against you. If you want to initiate the process, seek a competent attorney and begin the legal jargon.
A will allows you to control your assets even when you pass by, allowing you to dictate the usage timeline. This is also an opportunity to take care of lifelong’s work without letting your illness or an irresponsible beneficiary waste your wealth. Therefore, consider setting up these two legal entities today for your valuables.
One CommentLeave a Reply
Thank you so much. Husband an I are in our 60s and we have not drawn up a Will yet.