“Success in business requires learning as fast as the world is changing.”
– Warren Bennis, Famous American scholar and advisor to 4 U.S. Presidents
Planning for the transfer of your estate and other assets is one of the most important steps you can take to help your family. If you have assets that would be more difficult to manage through a court process, like a business, and want to avoid wasting time, publicity, and expense in a probate process then a trust is for you.
The Estate Planning Trust
A trust provides a way to ensure the continued management and preservation of your assets and allows the avoidance of a probate court proceeding after your death.
When you create a trust, you transfer title to your assets into the name of the trust, typically with yourself as trustee. During your lifetime, you are the beneficiary of the trust and can manage the trust property the same way as if the trust did not exist. You can revoke or amend the terms of the trust at any time.
Your will acts in tandem with your trust, directing any assets you have not transferred into your trust during your lifetime to the trust following your death.
Is a Will any Different?
A will is a document in which you typically name guardians for minor children, making it important for young families. But with the availability of trusts, the purpose of a will is not as broad as it once was.
If you have prepared a will, the Probate Court of your state oversees the payment of your debts and distribution of your assets according to your will. The Court controls all distributions to minors and chooses the conservator of such assets.
The probate process is public, giving anyone access to your financial affairs including your neighbors, family, your beneficiaries’ creditors, and any other groups who stand to benefit from such situations.
If you become incapacitated before you die, the Court gets to choose who will control your finances and assets.
Benefits of an Estate Planning Trust
Legal avoidance of state probate taxes is one of the key benefits
Avoiding legal costs and the necessity to hire an attorney
Asset protection and personal privacy
Assets to remain available to be used for your benefit should you become physically or mentally incapable of managing your affairs
There is no need to reregister securities after death
Assets in a trust at the grantor’s death can be immediately available to a successor trustee
Simplification of the transfer of property at death if the original will cannot be located
Contact Omni Resources to learn more about how a trust would impact your business and your family.
In the case of litigation, incorporating your business provides personal asset protection, but it does not protect business assets. Setting up separate companies for separate businesses will protect a business' assets from creditors of a second business that you own. Setting up a trust also helps to protect your business assets.
Whether a trust is appropriate for you and your beneficiaries depends on your specific needs and circumstances.
A trust is often associated with only the wealthy and elite with assets worth millions of dollars when, if your net worth is more than $5,000, the advantages of creating a trust significantly outweigh the set-up cost, ensuring greater protection than any will could. If you have a simple balance sheet (less than $2,000) a will may be sufficient.
To protect your affairs which include your assets like your business, call us today to learn how Omni Resources can create the proper trust for you.
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Editor’s note: Nothing in this blog post should be construed as legal advice of any kind. Any legal, financial, or tax-related content is provided for informational purposes only and is not a substitute for obtaining advice from a qualified legal or accounting professional.