Consider the Advantages of a Trust
Why would you have a trust instead of or in addition to a will? As with a will, property in a trust will be distributed according to the instructions you place in the document. But the added bonus is that your loved ones will not have to use the probate process, saving them considerable time and expense. You may also choose to have both a will and a trust to handle different aspects of your estate.
Establish a Management Plan
You may decide to use a trust because you don't want your property distributed immediately when you are gone. Creating a trust allows you to establish a management plan for your family. Assets in a trust are distributed according to a schedule that you specify.
There are many reasons why you might not want your property distributed right away. You may be concerned that your spouse is not capable of managing the property or, if both you and your spouse are gone, your children may be too young to receive your property. You may not want the legal guardian of your children to have control of your property. Or perhaps you are worried that your children's creditors or spouses will try to lay claim to your property when you are gone. A trust allows you to protect against all of these risks. In a later chapter you will learn how to create a trust and will find that the document is easy to modify when necessary.
Choose the Trustee
Many people think you have to involve a bank in order to have a trust. This is not true. You can serve as trustee while you are living but name a family member or other loved one to serve as trustee after you are gone. A bank needn't be involved unless, of course, you want one to be.
You can place instructions in the trust document that will guide your trustee on how to manage your property. The instructions can be very flexible, granting a trustee the power to distribute property when the trustee feels it is appropriate, or the trust document can set out very specific instructions that must be followed.
If your estate is subject to federal estate taxes, you will probably want to consider using a trust. A trust may well reduce the taxes owed by your estate. Trusts are extremely flexible legal documents. There are a few more steps involved to create the trust, but the savings may be considerable when your estate is being closed. Chapters 11 through 14 will cover trusts in more detail.