People often ask “Why do I need a trust?”  Some folks think they can get by with a simple will.  Here is why you probably need more than that:

1. Estate tax savings. Depending on the size of your estate and your state’s tax laws, there may be a significant tax advantage to including trusts as part of your estate plan.
2. Probate avoidance. If you fund your trust during lifetime, you will avoid probate.  Avoiding probate means your family will not have to go to court to authenticate your will after your death in order to access your assets.  It saves time and money.
3. Planning for incapacity. Another benefit to funding your trust during life is that your successor trustee can access the assets for your benefit if you become incapacitated.  If you are in the hospital or a long term care facility, who will pay your bills and manage your assets?  If your trust is funded, the successor trustee can do that.  Otherwise, your family may have to go to court to have a conservator appointed to oversee your assets.
4. Limiting children’s access to their inheritance. If you have minor children, you want to make sure their inheritance is overseen by a trustee until they are old enough to manage the monies themselves.
5. Making lifetime gifts to children. If you want to make a lifetime gift to a child, this is best done through an irrevocable trust to define the child’s access to the funds and to allow you some tax savings.
6. Protecting beneficiaries from themselves. If a beneficiary has a drug addiction, spends a lot of money, or just makes poor choices, having a trustee will limit the beneficiary’s access to the trust funds.
7. Divorce happens. If a beneficiary goes through a divorce, a trust could prevent their divorcing spouse from obtaining all or a portion of their monies in a settlement.
8. Creditor protection. If a beneficiary is in a business or profession that makes her susceptible to lawsuits, having a trust can protect the assets from reach by her creditors.  Clients with children who are physicians often keep the child’s inheritance in trust to protect from any such judgments.
9. Provide for a new spouse. If you have children from a prior marriage and a new spouse, a trust can help you provide for your new spouse while ensuring that the children will be the ultimate beneficiaries of the assets.
10. Limit a spouse’s access. Do you really want your surviving spouse spending your hard-earned money on vacations, spending sprees and a new boyfriend or girlfriend? Trusts can prevent these scenarios.

Trusts can play an important role in your estate planning.  Don’t overlook them. There are many aspects of trust planning that can yield significant benefits for you and your family.  Be sure to consider them when speaking with your estate planning attorney.