For many, stay-at-home or safer-at-home orders have slowed busy lives. As you’re spending more time at home, you may find yourself reflecting on future plans and the things that are most meaningful to you. Trusts can help you carry out these plans. They are an important part of a well-crafted estate plan for many families — even those without millions of dollars in assets. With a trust, you can set up precise controls for your assets, keep the details of your estate private and, if necessary, avoid estate taxes.

There are a variety of trusts that can help you accomplish these and other goals. Here’s an overview of what you can do with a trust.

Transfer assets to minors or young adults

You may want to leave assets to loved ones who are not old enough or responsible enough to manage them. A trust can hold wealth for your beneficiaries until they are better equipped to handle it. In the meantime, a trustee you’ve named will manage the assets.

When your beneficiaries reach the age or other benchmark that you’ve designated, the trust can transfer wealth to them on a schedule that you lay out in the trust documents. You can also use the trust to proscribe how the money can be used, such as for funding education or purchasing a home.

A “spendthrift” trust puts power in the hands of the trustee to decide when and for what purpose trust assets can be spent. This approach may be appropriate for beneficiaries you worry will spend money frivolously.

Give to charity

Trusts can help you give to your favorite organization. For instance, you can establish a charitable lead trust for a set period of time, such as 10 years. During this period, charities named by the trust receive interest payments from the trust’s assets. When the period is over, the trust principal is returned to a non-charitable beneficiary (for instance, you or another designated beneficiary). In addition to achieving charitable goals, these trusts can provide potential estate tax savings for beneficiaries.

You may also explore a charitable remainder trust, which disburses income to the individuals you select for a given period of time. At the end of that period, the remaining trust assets are donated to charity. 

Avoid probate and gain privacy

Without a trust or a will, your estate may pass through probate court, which can be a slow and costly process. In addition, probate proceedings are part of the public record. A revocable trust can ensure that your assets remain private and your beneficiaries have access to them as quickly as possible.  What’s more, you can change the terms of a revocable trust at any time.

Avoid or reduce taxes

The estate and gift tax exemption is $11.58 million for individuals who die in 2020. Most people will fall outside this limit and owe no estate taxes. For larger estates, trusts can help reduce the tax bill.

For example, an irrevocable trust allows you to move assets out of your estate and into the trust, where they are no longer subject to estate taxes. Irrevocable trusts are unalterable. So while your beneficiaries have access to the assets according to the terms you’ve set out, you can no longer access those funds — even if your circumstances change.

Trusts are useful, though often complicated, tools. If you’re interested in establishing one, consider consulting an estate planning attorney who can help you establish a trust that’s appropriate for your goals.