An estate plan usually includes several different types of documents. A trust is a legal mechanism that allows you to set conditions on the distribution of certain assets following your death.
A trust is generally a good thing to have, but it may not be the only estate planning document that you need.
What does a trust do?
Trusts are very popular in estate plans. Assets in a trust are not subject to probate. This means that, by putting your assets into a trust, you allow your beneficiaries to receive their inheritance more quickly. You can also put conditions on trust assets so that the distribution takes place gradually over a period of time. This may be helpful if you have concerns about relative spending his or her inheritance all at once.
There are different types of trusts available. According to CNN Money, a living trust allows you to keep control of your assets while you are still alive. This allows you to put the bulk of your assets in the trust in anticipation of your eventual death.
What does a will do if you have a trust?
You have to have any assets that you want to go into your living trust retitled. It may not be possible to retitle all your property to go into your living trust before you die. If you also have a will, you can leave instructions for the disposition of your remaining assets. The residual property still has to go through probate, but you can determine its distribution thereafter.
Wills also accomplish things that trusts cannot. Trusts can set aside money for your minor children in the event that you predecease them, but you usually need a will to name a guardian for them.