Most people try to put off planning for their senior years and beyond for as long as they can. After all, making important life decisions can be daunting, especially if these decisions involve shifting assets to loved ones. But if you want to maintain financial wellness in your senior years and ensure you provide for your family even when you are gone, there are certain things that you have to do as early as you can.
One of the things that you can do right now is to make a will. Doing so while you are young and able prevents you from making big mistakes, which could cost you and your heirs in the future. Setting up a trust should also be prioritized since it ensures the management of your assets according to your wishes. Unfortunately, only a few people choose to create trust since they believe it is not for them. For your guidance, here is what you need to know about common misconceptions about trusts and why you must establish one.
Only Those with a High Net Worth Can Set Up a Trust
Many people believe that trusts are only for the extremely wealthy. But while many rich people set up trusts, even those with average incomes can benefit from a living trust in different ways. For instance, if you have minor children, the idea of them having access to a large amount of money at a young age can cause worries and anxiety. However, a trust can hold the money you bequeathed to them until they are responsible enough to manage it themselves. Also, if your child is irresponsible with their finances, a trust can hold the money and distribute it as needed throughout your child’s lifetime.
A Trust Cannot Be Amended
There are many reasons why people would want to make changes to their trust. Some of these include the birth of a child or a grandchild, a divorce, remarriage, the death of a beneficiary, or a change in financial situation. Most believe they cannot amend or change a trust after its development. The idea of permanency can be scary for many people, but thankfully, you can create a revocable trust and make amendments to it. Each amendment should be signed in the presence of a notary to reinforce the trust’s legal standing.
If you choose to have a revocable trust, it is crucial to have an experienced trust attorney to help you make informed decisions and protect your interests. Make sure your lawyer can easily reach and assist you by appointing one within your area. For instance, if you live in Illinois, having a Chicago trust attorney is recommended to help you navigate the complexities of a revocable trust.
A Trust Protects Only Beneficiaries
People create trusts to ensure their beneficiaries will be taken care of, but did you know that it can also protect you if you become incapacitated? If you have reached a point where you cannot make decisions due to a medical condition or an accident, a successor trustee can manage your assets on your behalf. They can even ensure that a portion is available for your care and medical expenses. This allocation can be advantageous when you are estranged from your relatives or cut ties with your immediate family.
Setting up a Trust
Once you have decided to set up a trust, there are some things that you need to do to start the process. Sit down with your trust attorney and list all the assets you would like to include in the trust. Ensure you include real estate, personal properties, vehicles, life insurance, bank accounts, businesses, investments, bonds, and stock certificates. Next, specify who you would like to receive the assets upon passing.
Apart from immediate family, relatives, and friends, note that you can also bequeath assets to charities or institutions, so that is an option if you want to keep giving to a good cause even when you are gone. Make sure to name your successor trustee, too, covering all bases in case the inevitable happens.
Anyone can establish a trust, so consider doing so to protect yourself and your loved ones. Consult an experienced trust attorney to guide you and bring you peace of mind.
