Purpose of a Trust in Estate Planning | Attorney Explains
Discover the main purposes of a trust, including avoiding probate, protecting assets, and controlling how your estate is distributed. Learn more from an estate planning attorney.
What Is the Purpose of a Trust?
A trust is one of the most versatile tools in estate planning. While many people think of trusts as something only the wealthy use, the truth is that a trust can benefit almost anyone who wants to protect their assets and make the transfer of wealth smoother for their loved ones.
So, what exactly is the purpose of a trust? Let’s break it down.
1. Simplify Probate
One of the main reasons people create a trust is to simplify the probate process. Probate can be time-consuming, costly, and public. Assets in a trust typically pass directly to your beneficiaries without court involvement, saving time and maintaining privacy.
2. Controlling How Assets Are Distributed
With a trust, you can set specific instructions for when and how beneficiaries receive their inheritance. For example, you might:
- Provide funds for education only
- Distribute assets gradually over time
- Delay full access until a beneficiary reaches a certain age
This level of control is especially useful for minor children, beneficiaries with special needs, or those who may need help managing money responsibly.
3. Protecting Assets
Certain types of trusts can protect your assets from:
- Creditors
- Lawsuits
- Divorce settlements
This protection can be important if you have significant assets or if you want to preserve wealth for future generations.
4. Planning for Incapacity
A revocable living trust allows your chosen successor trustee to manage your assets if you become incapacitated. This avoids the need for a court-appointed guardian or conservator and ensures someone you trust is in charge.
5. Reducing Taxes
For larger estates, certain trusts can help minimize or eliminate estate taxes, preserving more of your wealth for your heirs.
6. Supporting Charitable Goals
A charitable trust can be used to support causes you care about while also providing tax benefits.
The purpose of a trust is to give you control, protection, and efficiency in managing and distributing your assets — during your lifetime and after you’re gone. Whether you want to avoid probate, safeguard your wealth, or provide for loved ones in a structured way, a trust can be customized to fit your goals.
Interested in learning how a trust could fit into your estate plan? Our experienced estate planning attorneys can help you design a trust tailored to your needs. Contact us today to get started – 203-885-0500