A will is a foundational element in any Pennsylvania estate plan. When you die without creating a will, it becomes the state’s responsibility to decide what happens to your assets. While creating a will plays an important part in determining what happens to your assets in the future, there are limits to what a will might accomplish.
According to Kiplinger, many people choose to supplement their existing estate plans by establishing one or more types of trusts. While different types of trusts do different things, there are many reasons you might want to think about incorporating one into your estate plan. Here are three.
1. It helps you control beneficiary spending
If one of your beneficiaries is irresponsible with money, you may not want him or her inheriting a substantial windfall from you all at once. A trust lets you make stipulations about when your beneficiaries inherit what you leave behind. This allows you to make periodic distributions, distributions only when certain conditions come to be and so on.
2. It offers protection against creditors
If you have beneficiaries that have creditors coming after them, leaving those beneficiaries assets in a trust effectively safeguards them from creditors. For example, if your beneficiary has outstanding credit card debt, the credit card company may not touch assets you leave that beneficiary in a trust.
3. It gives you more privacy
Some people do not want the details of their estates to become public. Assets you leave someone in a trust bypass the probate process and therefore remain private.
While these are common reasons many people establish trusts, there are also many other reasons to consider making a trust part of your estate plan.