Generally, estate planning starts with a will, which is important as it spells out your last wishes and the distribution of your estate. But wills are not always the best nor the only option in estate planning. In certain situations, a trust may be the better alternative.
When administrating an estate according to a will, there is the inevitable process of probate, which requires time and money. Before probate is granted, the assets of the estate are frozen, which for some may mean the family members’ access to cash flow is cut off. However, where there is a trust, there is no need for probate as the assets held under trust are not part of the estate. The assets held under trust are not frozen upon the demise of the settlor and are therefore readily available for the use of the beneficiaries.
A trust may be suitable if you have children, especially minor children. Your child is legally capable of inheriting the money you have left for them under your will when they reach the age of 18, but this does not mean that they should. Most parents would agree that letting their 18-year-old have complete control over a large sum of money may not be wise. With a trust, your child’s inheritance will be overseen by a trustee you have personally selected, and the inheritance would only be released to your child when they reach a specified age of your choosing, be it in a lump sum or in instalments.
Where you leave behind a surviving spouse and children from a previous marriage, a trust would be able to prevent the stepmother or stepfather from making decisions you would frown upon, such as spending the monies for their own benefit with no regard to your children’s legacy. In a trust, you can set specific instructions as to how your monies should be utilised for the essential benefit of your children i.e. education, healthcare, or living expenses. The trust monies can also be released in instalments over a period of time to minimise the risk of misuse.
Creating a trust does require more effort than creating a will, as it requires more strategizing and planning with regards to the distribution of your estate. However, with the right estate planner, it can be a fuss-free process and give your family members the protection they deserve.
We at HERITANCE WILLS are equipped with the legal expertise to assist you to
structure a Trust
draw up Wills / Legal Instruments that will efficiently
safeguard your legacy