Most people think of a will as the basis of their estate plan. Some people believe that’s all they need. They just assume they have to write out a document saying who is supposed to get what assets, and that’s all they need to do.
Writing a will is a great place to start, but don’t make the mistake of thinking that it’s all that you need. There are a lot of other tools you can use to accomplish very specific goals. For instance, if you want more control over what happens to your money, then you could use a trust.
How it works
To do this, you simply fund the trust with money that you control, or you set up a device – such as a life insurance policy – that will fund the trust when you pass away. Either way, this money leaves your control and enters the trust.
Next, you assign a trustee to distribute the money in accordance with your wishes. You may decide that they can only give your heirs the money for college tuition costs or related bills. You may decide that your heirs can only get the money out of the trust after they turn 30 years old. There are a lot of different options that you can use, depending on what you want to accomplish, but the trust is going to give you far more control than you would ever get from a simple estate plan with only a will.
Setting it up
The key is to get all of this set up well in advance and to do it properly, so make sure you know about the exact legal steps that you’ll need to take to accomplish your goals.