When it comes to revocable trusts, many look to them as a way of not having to pay as much in taxes. They offer quite a bit more in terms of benefits, though.
One of the reasons many decide to set up trusts is to ensure that their heirs won't have to endure a long, drawn-out probate process once they've passed. Trusts that are properly structured avoid this oversight altogether.
Another benefit of setting up a trust is that a successor trustee is appointed. If the settlor, or the person creating the trust, were to become incapacitated, then simply by having a trust in place, that successor would be able to step in and manage the assets contained within it. Without a trust in place, a durable power of attorney would be required to manage assets instead.
A third benefit to setting up a trust is that it can make gaining access to funds necessary to pay final expenses, such as funeral costs, a much quicker process. Trusts can also be used to shield a beneficiary from having their inheritance intercepted by a former spouse as part of a divorce settlement or from creditors if there are unpaid debts.
One common misconception about trusts is that once the settlor dies, a lump sum check is often cut to each beneficiary of the trust. This is not the case, though.
Instead, in many cases, the money is earmarked for another trust set up to benefit the beneficiary. Sometimes, this is contained within the trustees' own trust or is handled by a third-party trust company or bank. Either way, these parties then become the ones responsible for making distributions necessary to cover the beneficiary's education, health and other authorized maintenance or support costs.
If you're considering setting up a trust, then a Queens estate planning attorney can advise you of the many benefits of doing so.