One of the biggest misconceptions about trusts is they are exclusively for the wealthy. However, this isn’t true; even those with a modest income can utilize a living trust. But how will you decide if a trust is right for you?
First, you need to understand what a living trust is and how it works. A living trust is a fiduciary arrangement that allows an appointed trustee to manage your assets for you and your beneficiaries. Unlike trusts that are created in a will or funded after death, a living trust takes effect immediately. It is revocable during your life, and at your death, becomes irrevocable.
Here are four reasons why you should consider a living trust:
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You Have Young Children
If you have young children, you might want to utilize a living trust because it will give you more control over the use and management of your assets after your death than a will. Trusts give you the ability to withhold inheritance from young children until they reach a certain age. If your child receives a large sum of money when they turn 18, they will probably not know how to properly manage it. Having the money in trust will allow you to dictate when your assets are disbursed to your children and how much they receive at a time. In the meantime, the trust can provide for your child’s educational and other needs.
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You Have a Loved One or Child with Disabilities
Your living trust can include special needs provisions ensuring that your child has the funds they need and that those funds do not disqualify them from receiving public benefits. The assets in a Special Needs Trust are also not taken into consideration when looking at a person with disabilities’ eligibility for government programs such as Medicaid or Supplemental Security Income. This ensures that your special needs child or loved one is still supported and well cared for upon your death. By contrast, inheritance from a will would be considered when looking at eligibility.
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You Want to Avoid Probate
One of the downsides of estate planning with a will is that your estate has to go through probate upon your death. Your beneficiaries could endure months or years in probate and incur hefty attorney and court fees. Setting up a trust technically transfers assets from a trust maker to a trustee while the trust maker is still living. Therefore, probate court is not required to transfer ownership of trust assets to your heirs.
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You Value Your Privacy
Because wills must be filed with probate court upon death, they become public record and anyone can access them. However, a trust will remain private with those involved even after death because you are not required to file a trust through a probate court (see above).
We understand that navigating trust disputes can be difficult. The attorneys at Gaslowitz Frankel have more than 30 years of experience with will, trust, and estate dispute resolutions. Contact us today to see how we can help.
