Why Is It Important to Have a Trust?
When talking with a client, the question of whether or not they have a trust is always part of the first conversation we have. Why is a trust so important? Plain and simply because without one, you're leaving a nightmare for your family to deal with.
Someday when you pass away, your estate will automatically pass through probate court. This is a process that happens with everyone if you live in a probate state, regardless of your situation and it can be an extreme nightmare for your heirs to deal with and to navigate this lengthy legal process. (Not to mention it eats away at their inheritance going through the courts. You already pay your taxes, there's no reason to give the government even more money because you didn't plan ahead.) Probate court can be very time consuming, expensive, and there's no way to know for sure that your wishes will be carried out.
Want an example of the mess that can be created for your family that's left behind? When singer Prince died, he had no will or trust in place stipulating how his estimated $200 million dollar estate should be handled. Now, we are coming up on the two year anniversary of his death and STILL not a penny has been distributed to his heirs. Click here to read more about it. Another recent celebrity who passed without a will or trust in place is singer Aretha Franklin. This article details the nightmare that likely lies ahead for her family to deal with because these things were not put in place. Whether you have a large estate, or a smaller estate, it's still subject to the same headaches if you don't have the proper paperwork done to protect what you've built.
During the retirement and estate planning processes, establishing a trust is very important if you want to spare your family or heirs the stress, trouble, and headache of having to deal with probate. If you've established a Trust, your assets pass straight to your beneficiaries, bypassing the probate process! (Wondering what a beneficiary is, and why it's very important to keep your beneficiary information up to date? Click here)
Long and the short of it? Having a trust in place means that YOU decide exactly what is done with your assets when you pass, not a court. Taking a little bit of time, and a little bit of expense now is well worth the benefits of protecting your estate for your family in the long run. Don't be Prince and Aretha!
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