What is a trust? A trust is a legal document that names a particular person (a trustee) to hold and manage assets belonging to the trust. Trusts can be helpful to avoid probate, manage your assets after you die, protect assets for your children or loved ones, or minimize tax consequences to your beneficiaries.
Do I need a trust? Many people think they need a trust for various reasons: their financial planner recommended it, their friends told them they need one, or they know other people who have one and want to do the “right thing.” But trusts are not always needed and each individual person’s needs and circumstances should be considered before deciding whether you need a trust. There are several questions your estate planning attorney should be asking you to help you determine whether you need a trust:
Do you have minor children?
Do you have adult or minor children with special needs?
How large is your taxable estate?
Are you married, and if so, what is the size of your spouse’s estate?
Do you own real estate outside of the state?
How comfortable are you with having your estate made public through the probate process?
Do you want to control your assets after your death? For example, do you want to make sure your heirs have money to pay for college tuition, a wedding, purchasing a business, or buying their first home?
Do you want to make sure your heirs have money to pay for college tuition, a wedding, purchasing a business, or buy their first home?
What is the difference between and trust and a will? There are several differences between trusts and wills. Generally speaking, a trust will help avoid probate while having a will does not. A trust may cost more money to create than a will does, but it may provide more protections for your assets than a simple will. Generally, a trust will not be made public (unless there is a law suit over the trust), while a will is subject to the public probate process. A trust can also help you control or direct your assets well after your death, while typically, a will does not allow your personal representative to do the same.
Can your attorney help you implement your trust? Yes. Our attorneys will advise you on how to use your trust. Sometimes, our clients have set up a trust with another attorney, but they don’t know why or how to use their trust. It is important to fully understand the reasons behind the trust and to make sure the trust is property “funded,” so it is used as it was intended to be. Please feel free to consult with one of our attorneys to better understand your own trust.