What Everyone Should Know About Using A Trust For Estate Planning

When it comes to estate planning, you may think that all you need is a will and everything will be settled after you pass away. However, a trust can be a better way to take care of your estate for everyone that will have to deal with it. Here is what you need to know about using a trust.

What's A Trust?

Think of a trust as if it were a company. When you have a business, it is the business that owns all of the assets such as the building, the inventory, and the money in the bank. The company also has rules for who has control over all those assets, especially if the decision-makers were incapacitated and unable to work. When you use a trust, you are essentially saying that all your assets will be placed within a legal entity with specific instructions as to who has access to them. 

What Is A Trustee? 

Every trust needs to have a trustee in order to follow the instructions of the trust. You need to pick someone that you trust to control your estate, make decisions on your behalf, and eventually carry out your wishes after you pass away. A trustee can be anyone, including a legal professional, as long as you trust them to follow the instructions of the trust. However, many people pick a spouse or close family member. You can even make yourself the trustee and then decide who will become the next trustee after you pass away or are unable to make decisions.

Why Not Use A Will?

A will dictates your wishes about what you want to happen with your estate after you pass, but those assets are yours up until that happens. The unfortunate reality is that life is complex, and there is a point at the end of your life where you are likely going to be sick and unable to make decisions. A will won't allow assets to be passed on until you pass away, while a trust gives the trustee the power to make decisions with your assets.

For example, if you need to go to a nursing home due to having Alzheimer's or a memory disorder, you may need someone to make the decision to sell your home so that you can afford that special type of care. Loved ones also may need access to your savings to help pay for your care. These are all good reasons to use a trust over a will. 

Contact a trust attorney to learn more.