If you hear the words “estate planning” and associate the term with dying, you’re certainly not alone. Most people think that an estate plan is all about their death and how their assets get distributed when they pass away. In reality, though, effective estate planning is about how you control your assets – both during life and after your life is over. Because the Last Will and Testament deals with post-death concerns, there has been growing interest in other estate planning tools such as the living trust. Unfortunately, many individuals and families often struggle to decide whether estate planning trusts are the right tool for their unique needs.
Of course, trusts aren’t necessarily the right choice for everyone. The fact is that many people have relatively simple needs when it comes to estate planning, and have no real need for a trust to accomplish their limited goals. For those individuals, the Last Will and Testament can usually accommodate their asset distribution needs, with powers of attorney providing the protection they need against possible incapacitation.
For those who need to protect assets and exercise greater control during life, however, trusts can be an essential tool. In fact, there are a number of special circumstances that may make it worth your while to think about using a trust to complete your estate planning effort:
- Are you concerned about possible estate tax issues? If you’re one of the very few people whose estate will ever be subject to the estate tax, you may want to take steps to minimize that exposure and ensure that more of your wealth goes to your heirs instead of to the government. There are different options available to help you accomplish that goal.
- Do you have minor children who need to be cared for? When your heirs are minors, you can approach the inheritance issue in a number of ways – including using your Last Will and Testament to name a guardian to manage their affairs. With large inheritances, however, it is wise to consider the use of a trust so that you can have assets in a protected estate planning vehicle that will ensure that they receive the assets when they reach a certain age or fulfill other conditions.
- Is there an heir with special needs who you need to provide for when you’re gone? If so, that heir could be reliant on certain government benefits that could be disrupted were you to simply leave a large inheritance in your will. With a trust, you can provide a way for your trustee to distribute certain funds for various amenities that your heir might not otherwise have access to, and do it without impacting benefit eligibility.
- Are you afraid that your heir will squander his inheritance? A trust can be a great way to ensure that a spendthrift heir doesn’t waste his or her inheritance, or lose it to creditors before it has a chance to provide any benefits.
- Are you concerned about being able to qualify for Medicaid when you’re older? If you are concerned that you might need nursing home care later in life, and worried about how you’ll pay for those high monthly costs, a trust may be able to help you manage your estate in a way that secures eligibility when you need it most.
- Do you want to provide for a charity when you pass away, but still want to ensure that your heirs receive their inheritance too? There are different charitable trusts that can accomplish a variety of different planning goals.
- Are you interested in ensuring that your grandchildren have an inheritance waiting for them when they’re old enough to enjoy it? Dynasty trusts can provide for those needs and help you to simplify the process of dealing with generation-skipping inheritances.
Don’t Make These Decisions on Your Own
Obviously, trusts are gaining more public notoriety with each passing year. There are now any number of online portals and trust “experts” in the marketplace today promising consumers a wide range of benefits from using trusts in their own estate planning efforts. The problem is that many of these so-called experts make it sound as though everyone needs a trust. They’ll talk about asset distribution, probate, tax savings, and many other benefits that make trusts sound too good to ignore.
Many people hear these sales pitches and become convinced that they absolutely must have a trust in their own estate plan. Others hear the same pitch and fail to see any connection between their needs and the benefits a trust can provide. Both groups often make the wrong choice, and often for all the wrong reasons. That’s because generic sales pitches simply cannot properly consider your unique circumstances and needs.
Trusts are complex legal arrangements, and are thus something that are best considered in consultation with professionals who have devoted their lives to dealing with the legal and financial issues associated with their creation and operation. It is important to not make estate planning decisions based on clever marketing campaigns, but rather based upon a clear understanding of how any given tool can meet your actual needs. To make that determination, you should consult with an experienced trusts attorney.
Get the Help You Need
At Frank & Kraft, Attorneys at Law, our trusts experts will do more than just offer you a prepackaged form document like those online marketers do. We have years of experience dealing with estates just like yours, and can help you to better understand which estate planning tools and strategies will best address your needs. We’ll assist you as you compare your options, and then help you with the creation of your trust if you decide that you need that tool to protect and maintain control over your assets. Throughout it all, we will provide you with the advice and representation you need to achieve your estate planning goals. To find out more about how we can help you with your trust needs, call us at (317) 684-1100, or contact us online.