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Estate Planning – Do I Need a Trust?

Clients ask me this question all the time. Do I need a trust? Some people mistakenly believe that a trust is somehow “better” than a will, or that everybody with significant assets needs to have a trust. Often, people want to avoid probate expenses, minimize estate taxes, or ensure a hassle-free process after they die. However, in many cases, we can achieve all of these goals without the expense of a trust. A trust is merely a tool in the toolbox of every good estate planning lawyer. Like any tool, it is the best tool for some jobs, and not the best tool for others. A good estate planning attorney knows this and will pick the best tool for your particular situation.

So how do you know if a trust is the right tool for you? Answering this question requires a detailed analysis of your financial assets, your financial goals, your family situation, and the legacy that you would like to leave for your heirs. A trust-based plan may be a good fit for clients who:

  • Prefer for their final wishes and the contents of their estates to remain private
  • Do not want their fiduciary (trustee/executor) to be subject to court oversight
  • Have enough assets to worry about being subject to estate taxes (current limit is $5.49 million, and married couples can double that)
  • Own real estate in multiple states
  • Have a spouse or heir with a disability
  • Have minor children
  • Want to place limitations or contingencies on their heirs’ inheritance
  • Want to allocate an inheritance for a specific purpose (such as education or medical expenses)
  • Do not want their heirs to have direct access or control of their inheritance
  • Have heirs with substance abuse issues or other serious legal or financial problems
  • Have complicated family dynamics (blended families, hostile family relationships, “rebellious” children, fear of family attempting to exert improper influence, etc.)

If these situations apply to you, a trust may be a good option for your estate plan. However, if you were shaking your head as you read through the list, there’s a good chance that you will be just fine with a basic Last Will and Testament. Our attorneys at The Heritage Law Group will help you choose the plan that is best for you.