Quite often, the popular notion of a trust is that it’s a device used primarily by the wealthy. Trusts are for grandparents who want to leave their grandchildren healthy inheritances so those grandchildren never have to work their entire lives, or so the popular misperception says.
But that notion is far from the truth. The reality is that trusts offer almost everyone the ability to take advantage of specific benefits not afforded by other estate planning tools. Whether you have a high net worth or have more moderate assets, almost everyone can benefit from creating one or more types of trusts. Here’s what you should know about trusts and why you probably need one.
Trusts are not just for the rich.
The reason so many people don’t realize how useful trusts can be is because the majority of people in the country never actually get around to making an estate plan. The first time most people encounter estate planning, or the lack of it, comes when a close family member dies, such as a parent or grandparent. When that family member dies and leaves behind an estate that has no guidance provided by an estate plan, it can leave a mess for the surviving family members.
One of the most popular and commonly used types of trust today is the revocable living trust. Through a revocable living trust you can allow your family to avoid almost all probate requirements. Revocable living trusts make it much easier to manage your affairs after you are gone, and even allow someone to step in to manage your property if you should become incapacitated.
Parents and Trusts
Parents with young children have to deal with a lot, and many of them worry about what might happen to their children should they die. Trusts are a potential answer to this comment worry. Through a trust you can provide your children with inheritances, but at a time of your choosing.
Many people, for example, are not comfortable with the idea of an 18-year-old child receiving a large inheritance. They often use trusts to structure inheritance to provide children assets at different ages, such as 25, 30, or even older. These trusts allow parents to not only protect their children and make sure their financial needs are cared for, but also give them the ability to provide inheritances in a manner that will guard against the common problems many people have upon inheriting large sums of money.
Individual Options
There are numerous trusts available to you, and you won’t be able to tell what type is right for your needs until you consult an experienced and qualified estate planning attorney. Make an appointment today so you can learn more about trusts and how they can help you in your estate planning efforts.
Timothy P. Murphy
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