Trusts have many terrific benefits but the initial set-up is a bit more costly. That said, by using Trusts, you and your heirs can save considerable money in the long run. Among the many benefits of Trusts are the following: the ability to improve tax planning; privacy; time-saving; save on costs and court fees; and limited asset protection.
This is one example of the difference between using a Will versus using a Trust to transfer assets:
USING A TRUST: a woman, Jill, passes away and leaves her home to her daughter via trust. While Jill is alive, the Trust actually owns her home and she is the beneficiary and Trustee – so Jill is effectively the owner, but not in name. When Jill passes away, the Trust still owns her property; however, the daughter is the backup beneficiary. This means that there is no waiting or paperwork needed to transfer ownership of the home. The daughter is immediately free, as backup Trustee and beneficiary, to sell the property or live in it or to do whatever else she pleases.
USING A WILL: If the same woman, Jill, leaves the house to her daughter via a will, there is no easy transition. When Jill passes away, the ownership of the home becomes a question – to be resolved by reading the Will. The daughter must file an action in the Probate Court to probate the will. In the mean time, someone has to pay for the upkeep of the house, condo fees, mortgage payments, gas, heat, electric, etc. The daughter cannot sell the house without special approval from the Court. Even if the Court gives her the special approval to sell, she has to wait for the original Will filing to be processed and only then can she request a court date for the judge to hear her motion to sell. She will likely wait two or three months for that court date, and then after she sees the judge, she has to wait again for the judge’s decision to be mailed to her. Then, only if the judge says yes – may she put the home on the market for sale. In the mean time, she has likely paid many thousands of dollars out of pocket, with the house just sitting there unable to be sold.
This is just one example, but there are many more. Using Trusts allows for an ease of transition that you just do not get with a Will.
Contact us today for more information on how to set up your own Trust.