You have a lot of decisions to make when creating your estate plan. One of them involves whether a will is enough to meet your goals. For some North Dakota residents, a will is enough to fulfill their wishes, but that does not hold true for everyone.
Someone may have mentioned to you that you could use a revocable living trust, but you aren't sure why you would need one. Under certain circumstances, a trust would provide the better option.
When would a trust be a good idea?
Your will may serve as the cornerstone of your estate plan, but in some situations, it doesn't serve you and your loved ones in the best way possible. Some of the situations in which a revocable living trust may prove useful include those listed below:
- If you remarry, you may want to make sure your children or others from your previous marriage receive an inheritance.
- A trust can help you and your spouse maximize all the available estate tax exemptions.
- There could come a time when you are unable to make financial decisions for yourself. A trust can compensate for this eventuality without any interruption in how you handle your personal affairs since your successor trustee can seamlessly take over handling your financial affairs.
- With a trust, you can keep the details of your estate private since none of the assets in your trust go through probate, which is a public process.
- If you are single, having a trust helps ensure that your assets are not subject to a guardianship if you become incapacitated and your loved ones do not have to go through probate in order to benefit from your assets after your death.
- If you have minor children, they cannot legally inherit property until they reach the age of majority, but they can benefit from your assets through a trust since they will not directly own the property. Your successor trustee can then distribute the remaining assets in the trust in accordance with your instructions as each of your children reach adulthood.
- If you own property outside of North Dakota, titling it in the name of the trust removes the requirement of an ancillary probate, which would mean going through the probate process in a state in which you were not a resident at the time of your death.
As you can see, there are more reasons to use a trust than you may have realized. Setting up a trust requires including certain language in order for it to work as intended. In addition, you will need to "fund" it, or put your assets into it, for you to reap the benefits of it. These steps require a certain amount of legal knowledge, so it would probably be greatly beneficial for you to work with an estate-planning attorney to make sure that everything is set up correctly.