There are many kinds of trusts. They aren’t just for the wealthy.
Our practice has featured the preparation of wills and trusts exclusively since 1995. In the intervening years, we have prepared thousands of each such plans, and now work extensively implementing them after a client has died. Our caseload is now about 45% administration of wills and/or trust.
We are often asked by clients which is better. That depends on many factors. But Trusts seem like a much better choice often, after the time comes to use the planning. If maintained and funded, a trust can be more cost effective, private and easier to administer.
On the other hand, I know many attorneys who scoff at the notion of using a trust for people who are not millionaires. Probate, they often assure, is not so bad. And is a trust necessary?
Everyone needs an estate plan. However, everyone should also at least consider a trust, according to The New York Times in “Life After Death? Here’s Why You Should Have a Trust.”It turns out that many people who are not wealthy, can also benefit from having a trust.
There are many different kinds of trusts which serve different purposes. One is a revocable trust, which the owner can change. They are considered by many to be the “work horse” of modern estate planning. A revocable trust can avoid the need for a public probate court proceeding after the person dies, saving time and keeping money from being immediately available to heirs and executors alike.
Trusts are also useful for times when people become incapacitated and need someone else to take care of their finances. Because many more people are living longer and the number of people with dementia is increasing, there are more situations where trusts are useful to the family and caregivers.
A will is different than a trust and is a public document. The probate process requires a disclosure of assets, bank and other financial accounts and the names of beneficiaries. That information remains private with a revocable trust.
Other considerations regarding trusts:
- You should have any type of trust set up by an estate and trust attorney.
- A house, real property, bank or investment accounts can be placed into a trust.
- A revocable trust does not always end at the death of the original owner. However, just how long it may last, depends upon the laws of your state.
- People also use trusts to protect their assets from others or to assure the long-term care of someone who is disabled.
- You can have a professional manager, family member or friend as a trustee or co-trustee of a trust. Sometimes having a licensed professional who has federal reporting requirements can provide an extra layer of protection.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include taking a close look at trusts.
Reference: The New York Times (March 22, 2018) “Life After Death? Here’s Why You Should Have a Trust”