Trustee services are necessary to help you manage and protect your assets during estate planning. With a trust, you have more control over the allocation of your assets and can protect yourself from liabilities. Here are a few instances where you will benefit from seeking the services of a trustee:
1. Avoiding Probate
Probate refers to court-supervised procedures aimed at authenticating your will and approving the distribution of your assets. Probate may take several months, particularly where there are disputes about your will or if you do not have a will. The process involves a lot of paperwork and costly legal fees. Probate also publicizes your family’s financial matters as the court documents become a public record.
Placing your assets in a living trust can help you avoid or shorten the probate process. Trustee services provide you with a legally enforceable document that explicitly states your wishes regarding the distribution of your assets. The document names your beneficiaries and executors of the trust, eliminating areas of ambiguity or dispute during probate.
2. Minimizing Liabilities
Transferring your assets to an irrevocable trust protects them from liabilities from creditors and lawsuits. When you employ an irrevocable trust, you denounce your ownership interest and surrender control over the assets. This means that the assets are no longer viewed as part of your estate and thus creditors cannot sell them to recover money you owe them. You cannot also sell the assets to cover legal fees, fines, or settlements. This protection keeps your loved ones from losing their inheritance should creditors or litigious persons go after them when you are no longer living. Trusts also reduce and sometimes eliminate estate taxes. The government no longer deems the assets in the trust to be part of your estate.
3. Providing for a Loved One
The government provides Medicaid and supplemental income to individuals living with disabilities who cannot support themselves. Leaving assets directly to a loved one with a disability can disqualify them from these federal benefits as asset ownership indicates they can support themselves. You can instead set up a special needs trust under the control of a third party who is not a beneficiary. This allows your loved one to benefit financially without losing their federal benefits. For your loved one to maintain their disability benefits, the trustee can only use the trustee assets to supplement their government benefits. That means the trustee cannot directly allocate assets to your disabled loved one.
4. Leaving an Inheritance
A trust allows you to leave assets to a minor under controlled terms. In these situations, an adult takes charge of the inheritance until the beneficiary attains adult age. Such a trust reduces your estate taxes as it shifts the taxable income to the minor, who has lower tax rates. A trust set up for a minor can be complex or simple and allows for the distribution of the income from the trust in a lump sum. A complex trust may have specific terms of income distribution, such as a specified amount each month. If you have concerns about your child misusing their inheritance, set up a complex trust to limit how much income they can access at a time. You can also give the trustee full discretion to determine how much of the trust’s income to distribute to the beneficiary at a time.
Manage Your Assets Better With Trustee Services
Trustee assets are invaluable during estate planning and asset administration situations. By establishing a trust, you minimize the likelihood of property disputes among your loved ones and lengthy probate proceedings. You also avoid unexpected asset losses due to claims from creditors, litigators, and tax authorities. Find a reputable and trustworthy trustee to help you set up an undisputable trust today.
