When planning for the future, understanding all your options is essential to ensuring you have all the information you need to make the most informed decision. One of these choices surrounds how you will distribute your assets to your beneficiaries. You’ll need to decide if you want to create a trust fund or an inheritance to leave assets to your loved ones. However, many are unfamiliar with the advantages and drawbacks of these options. Continue reading to learn about the differences between a trust fund and inheritance, and discover how a Washtenaw County trusts attorney can help you navigate this situation.
Are There Differences Between a Trust Fund and Inheritance?
Though many people use these terms interchangeably, there are significant differences between a trust fund and inheritance, and understanding how they differ can help you make the most informed decision.
Generally, inheritance is when someone leaves a gift to a beneficiary to receive after they pass. For example, a granddaughter may inherit a sum of money and some jewelry from her grandmother after her passing.
Many also choose to create a trust fund, which is an estate planning tool that holds assets, funds, stock, and property aside until the terms and conditions you created are met. When you place assets in a trust fund, you must appoint an agent, called a trustee, to manage and distribute the assets according to your wishes.
What Are the Benefits of Both Options?
Both options have benefits and drawbacks, so you’ll need to take both into consideration before you choose the best estate planning tool for your needs.
Generally, inheritance is ideal for those with a small number of funds or sentimental items they plan on leaving to their loved ones, as this is a more cost-effective choice. Due to the complexities and additional security, setting up a trust fund can be expensive. An inheritance also benefits those who think removing assets will help reduce tax liability.
If you plan on leaving a significant amount of assets to loved ones, setting up a trust may be a better option due to the additional control and measures you can place on the account. Because of the significant number of assets held, trust funds are not subject to estate taxes, making them a viable option.
Why Do I Need a Washtenaw County Attorney to Help Me?
When you want to create a trust fund or leave an inheritance for beneficiaries, you’ll need to enlist the assistance of an experienced and dedicated attorney. As these assets are handled after your death, ensuring that you’ve taken all necessary measures for your wishes to be followed is vital.
At Collis, Griffor & Hendra, our legal team will work tirelessly to provide you with the peace of mind you need. We can help ensure that all the estate planning documents you choose to set up are valid and legally binding so you can enjoy your future. Contact us today to learn more about how we can help you.