How a Trust Can Protect You and Your Family
One of the biggest misconceptions that people have about estate planning is that trusts are only for the super-wealthy. That's simply not the case. A trust, in its simplest form, is a probate avoidance mechanism.
It's not the only one, but it is a particularly good one.
If you do not have a will, trust, or written estate plan, your kids and your assets will be subject to the court process known as probate. A judge will decide who raises your kids, as well as who manages the money you leave for them, how that money is managed, and they'll likely receive outright and unprotected at the age of 18.
This process could take up to 12-16 months or more, up to 3% or more of the total value of your estate, and is completely public. Even if you prepared a will, your kids and your assets are likely to still be subject to the probate process. However, you do pick up the advantages of being able to decide who manages the money you leave for your kids, how that money is managed, when they will receive it, and any protections and restrictions you want to place on it. Those are big advantages. But your family is likely to still have to go through the probate process.
A properly prepared and funded trust, in its simplest form, allows you to determine who manages the money for your children, how that money is managed, when they will receive it, and any protections and restrictions you want to place on it while also allowing your family to avoid probate and a courtroom.
So if you'd like to protect your kids and your assets while also protecting them from the court process known as probate, then you may want to consider a trust as part of your comprehensive estate plan.