Without a comprehensive estate plan, a significant part of the work you've done throughout your life, both at your job and with your investments, can be lost or given to unintended beneficiaries" (InvestorGuide.com).
Estate planning is also important for recipients of social security benefits as "receiving an inheritance may alter his/her social security entitlement. This is particularly prevalent when one member of a couple dies as the survivor is then treated as a single person with lower thresholds under income and assets tests. This means that the levels of assets and income at which the pension starts to reduce and ultimately ceases are reduced which may result in a lower pension or even a complete loss of pension for the beneficiary" (Social security estate planning implications ).
Now there are more than one way of planning your estate, especially what to expect after death. The most popular of which is the last will and testament. However, recent developments in finance provides estate planners a better way of handling their estate, that which entails lesser cost, direct or indirect to the heirs: trusts and superannuation.
In this particular paper, we will show the many ways in which trust and superannuation supersedes the benefits of the estate planner and their heirs; both through current literatures and through analysis.
"A trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can be the trustee of your own living trust, keeping full control over all property held in trust. A 'living trust' (also called an "inter vivos" trust) is simply a trust you create while you're alive, rather than one that is created at your death" (Nolo). One good thing about living trust is it helps one evade probate, helps reduce taxes and also sets up a long-term property management (Nolo).
Trust Versus Will
"The Trust owns the legal title to the property in it while you are still alive, and since a Trust does not end at your death, it will still own the property when you die. You put instructions in the Trust for how the Trustee, or person controlling the Trust, should distribute the Trust property, and the Trustee will carry out those directions" (FreeAdvice.com).
One important feature about the trust is it can be distributed without necessarily going through the probate process - a "legal process which inherited property goes through in order to transfer the title of the property from the decedent to the beneficiary" (FreeAdvice.com). The main reasons why trusts are advantageous especially for the high net worth individual is it is far less expensive to administer (FreeAdvice.com).
On the other hand, "a will is a document that transfers property to others after your death. Because you still own the property at the time you die, all the property transferred in the Will must go through the probate process, which is often slow and costly" (FreeAdvice.com).
Below is a summary of the advantages of a trust over a will:
Avoid probate - Unlike