Many Indiana residents have heard about trusts. However, not many people actually understand what they are and how they can be beneficial. The reality is that a trust can provide many advantages to those who are planning their estates.
When a person passes away and has a will in his or her name, it will go through the probate process. This is a process that requires the will to be validated and can take anywhere from months to years depending on the size of a person’s estate. The creation of a trust sidesteps the probate process for the items in the trust. The trust’s assets will automatically transfer to your named trustees.
Establish parameters for the use of the assets
Another benefit of a trust is that it allows you to specify how you want an asset to be used. Some examples of parameters that you can establish include making an age attainment provision or a stipulation that states that the funds must be used for tuition. There are endless possibilities when it comes to the parameters that you can establish for your assets.
Potential tax benefits
There are a couple of different ways that setting up a trust can help reduce your tax burden. First, if you meet certain conditions, the assets in your trust can be sheltered from estate taxes upon your passing. Second, you can make annual contributions to the trust without having to pay gift taxes each year.
Establishing a trust can be a great idea for individuals who have various assets that they would like to pass to others after their passing. Trusts help shelter you from taxes, allow you to establish parameters and prevent your loved ones from having to wait for the probate process to conclude before receiving their intended assets.