Pros and Cons of Putting Your Estate in A Trust for Your Children
A trust allows you to decide how you want your property to be entertained upon your death and there are typically two types of trusts that are the most common:
- Revocable: You will have full control as long as you are living. You can add or remove assets from the trust as you please.
- Irrevocable: Once the trust is created, all assets will be owned by the trustee. The management of the trust will also depend on the trustee if you are incapable.
Many people often place their estates in a trust to ensure financial security for their children. Discussed below are the pros and cons of creating such a trust for your children.
Pros of Having a Trust for Your Children
If you have children who are financially irresponsible, then having a trust in place can provide security in the long run. A trust will also protect their inheritance from falling into creditors’ hands during bankruptcy or being allocated to their spouses during divorce proceedings. Assets placed in the trust cannot be liquidated by any judge and neither can they be claimed during a divorce.
When you create a will, dissatisfied family members might wish to contest it. On contesting, it will become a real hassle for all heirs. However, putting your estate in trust makes it difficult for any member to contest it. This protects your child from any harassment and also protects your interests.
Usually, when you die, all of your assets (assets which you legally own), which will not be automatically transferred to someone else, will be subjected to probate. However, the assets placed in a trust will not be subject to probate. Probate is usually very time consuming and expensive. The whole process of probate will involve court costs and attorney fees. However, if you put your estate in a trust for your child, then they will own it and not you. Therefore, probate will not be applicable, and a lot of time and money will be saved. Trusts are never exposed to public scrutiny. In probate proceedings, you are required to deal with the court but with trusts, your privacy is maintained.
Cons of Placing Your Estate in a Trust
Creating a trust is more expensive than drawing up a will. This is because it involves not only the attorney’s fees but also the cost of transferring assets. Setting up a trust can be a very complex process, which is why you need an experienced attorney to help you do this.
Trusts also need to be very detailed and all instructions must be clearly stated. Failing to do so can result in your wishes being misinterpreted and your estate not be handled the way you had wished for.
Contact an Experienced Estate Planning Attorney Today
If you have questions about whether a trust is right for you, contact Tampa estate planning attorney David Toback today to schedule a consultation. We have years of experience dedicated to ensuring our client’s final wishes are handled the way they want.