Creating an estate plan involves using several different types of documents to protect your loved ones and your assets. One particularly useful document is an inter vivos trust fund, which can be used to control how wealth is distributed. An inter vivos trust is a trust created and funded during your life, also called a “revocable trust” or a “living trust”. A trust fund is different from other estate planning documents, such as a will, and it offers unique benefits like the four listed below. 

4 Benefits That a Trust Fund Provides

1. Use in Life and Avoiding Probate at Death

A revocable trust is usually set up and funded long before your death. You still have need of the funds in the trust, and a revocable trust will allow you continued access to the funds you put inside. In effect, the trust becomes your alter ego.

Later, if a revocable trust is properly funded, there is no need to probate the will at your death. Though it has its place, probate can be costly and time-consuming, which many clients want to avoid. With a properly funded trust, at your death or incapacity, the successor trustee simply notifies the proper institutions of your condition and takes over the administration of the trust without needing to get court approval. This quick, inexpensive, and often seamless ability to transition administration from one person to another is a key selling point for many estate planning clients.

2. Protects Privacy

Upon someone’s death, their estate goes through the probate process. Since probate is a court proceeding, the person’s will is a matter of public record and can be viewed by anyone willing to go to the courthouse. However, assets held in a revocable trust are not subject to the probate process and are therefore not a matter of public record. Celebrities and other people who value their privacy favor trusts for this reason.

3. Reduce the Taxes You Owe

Upon your death, there will be an estate tax due — this is also referred to as a death tax. The amount owed is based upon the total assets you possess at the time of your passing, so your estate will be charged more if you own more assets. However, an estate planning lawyer can help you set up provisions that will protect some of your assets and reduce the total amount of estate taxes owed. This will help in allowing your beneficiaries to collect a larger portion of their inheritances. 

4. Protect Your Family 

Your estate planning attorney can help you draft a document that controls how assets are distributed to a loved one. You might have a loved one who is irresponsible with money, or you may want to ensure the inheritance will be spread out over a specific number of years. You can use the document to control the assets in this regard, helping to meet your planning wishes. The control offered by a trust will help ensure that your children, spouse, and other loved ones are taken care of even when you aren’t around.

Creating trusts is an essential part of the estate planning process for the reasons listed above. When you create these documents with the help of the professionals at Trailhead Estate Planning in Signal Mountain, TN, you’ll have the peace of mind in knowing that your assets are protected. Their team has the expertise and knowledge to help you ensure you will be protected as you age and your loved ones will be cared for after you die. To schedule a consultation, call (423) 228-7029. Visit them online to learn more.