"Do You Think I Need a Trust?"

Estate planning can be simple or complex- but in all cases a good estate plan should be prepared to address your specific personal goals and wishes.  One of the most frequent questions asked by clients is “do you think I need a trust”?  There are two primary estate planning vehicles for distributing property after death: a will and a trust. While both types of plans utilize similar documents, the use of these documents may be different. Contrary to what you've probably heard, a will may not be the best plan for you and your family. That is primarily because a will does not avoid probate upon your passing.  But unlike a will, a trust can avoid probate and designate who will control your assets while you are alive and well, disabled and ultimately upon your passing.  Which vehicle you choose is much like shopping for a vehicle, you make a choice based on your needs and preferences.

Will Based Plans:  A will allows you to select the executor or personal representative to manage and distribute your assets after you have passed.  However, it does not address the management of your assets during your incapacity nor allow for any disability planning while you are alive.  Most importantly, with a will-based plan your estate will likely be subjected to the probate process which can be no shorter than six (6) months. A way to avoid this sometimes-lengthy requirement is to create a revocable living trust to convey your final wishes.

What is a Trust?:  A trust is an agreement between the grantor, the person who assigns control of an asset, and a beneficiary who ultimately receives the benefits upon death. This agreement is managed by a trustee who insures the trust is handled per your request when it comes into effect.  The concept of a revocable living trust is that you govern and control your assets while you're alive and well and there is also a plan for how your assets will be governed and administered during your incapacity and again upon death. Proper trust-based planning does take an extra step called “funding” wherein you retitle certain assets to the trust.  You can retain the right to revoke the trust and the contents of your trust are generally private, unlike wills which normally are public record.  In the event you own property or anticipate owning or inheriting property in a jurisdiction outside of the one in which you live and you have a will-based estate plan, your estate may be subject to multiple probates upon your passing.

Lastly, the trust does not have to be designed to live on in perpetuity after your death. A majority of my clients designate their assets to pass to beneficiaries outright, meaning as soon as everything is administered after death the beneficiaries receive your assets and the trust is dissolved.  Certainly, you can do legacy planning and have the assets you leave behind protected from your beneficiaries’ creditors, predators, and/or a former spouse. In other words, it can be as simple or as complex as you desire.

In summary, any estate plan is better than no plan and you are ahead of the game if you have a plan in place. That being said, a revocable living trust can be utilized to avoid probate and provide for a seamless transition between spouses and to beneficiaries.  Whether or not you feel a trust is an appropriate vehicle for you, it is my goal for you and your family to ensure your affairs are administered as smoothly as possible and your estate plan is set up in a way that maximizes your ability to achieve your goals.