In our last post, we began speaking about specific ways to keep your estate out of probate. Probate, depending on the state one is in, can be a time-consuming process and expose one’s family affairs to legal battles open to the public eye.
Some prefer to avoid such possibilities. In the state of New Jersey, probate may be less of an issue than in some other states, as the process here is fairly straightforward and inexpensive. Filing fees, for instance are usually less than $250 and are not based on the percentage of the value of the estate assets. That said, there are benefits to pursuing a trust-based estate plan besides avoiding probate. Here we’ll focus on three of these benefits. In reality, though, there are many more.
First of all, trusts give one the opportunity to protect children who are incompetent in some way, or children who have alcohol or drug problems. In such cases, one wouldn’t want to leave assets to these children outright. Trusts, however, allow one to provide distributions to such children and to establish conditions for the receipt of trust funds.
Trusts are also good for those who desire professional management of assets. This would be especially important for more complex assets that require specialized knowledge to handle.
A third benefit to trusts, and a big one, is the tax-planning opportunities they afford. The degree of this benefit really does depend, though, on how much money is in the estate. One popular form of trust that allows for significant tax savings is a family or bypass trust. The key to these arrangements is to consult with an attorney who is aware of the ever-changing laws in this area.
These are only some of the benefits of trusts. Suffice it to say that trusts can be quite valuable in estate planning.
Source: Gazettes, “ESTATE PLANNING: Ways To Avoid Probate,” Curtis Kaiser, October 8, 2012