You’ve received an inheritance, or you think you did, you were named as a beneficiary of a trust. So is that the same thing as being a beneficiary in a will and inheriting property?
No, it’s not, and here’s why:
1. A person can create a trust in countless ways. The only restriction is that the trust may not function for an illegal purpose, so the door is left wide open. For example, a trust can be created to hold money or property until you reach a certain age, or even until you achieve a certain goal, such as graduating from college. On the other hand, if you were to inherit money from a will, you normally receive your inheritance when the estate is settled.
2. A trustee is the person who manages a trust, they not only manage the property held by the trust, but they can also determine the best time and method for distributing the assets, as long as their decisions are made for the benefit of the beneficiary and in accordance with trust documents. There is not that level of oversight and control with an inheritance received as a bequest within a will.
3. A trust can help protect the assets held within the trust from your creditors. While you may not be able to access funds when you want them, neither may your creditors in some instances. Therefore, a trust can act as an asset protection device for you, while a will cannot do so.
While it may seem there are strings attached to being the beneficiary of a trust, the trust does act within the best interests of the beneficiary – you. If you need assistance with creating a trust, leaving an inheritance or even estate litigation, an estate planning attorney can help you.