People typically make two big mistakes when it comes to estate planning. The first is that they put off the process indefinitely. The second big mistake that a lot of people make with their estate plan is to keep it as simple as possible.
Many times, people prioritize how quickly they can get in and out of an estate planning appointment rather than maximizing the protections they will get from that plan. While a trust might mean slightly more financial investment while estate planning and a slightly longer process as well, a trust can protect you and your loved ones.
There are dozens of great reasons to use a trust, but the following three are some of the most common.
Someone you love has special needs
If you have a child or other loved one with special needs, creating a trust for their inheritance can protect them in several ways. A special needs trust won’t prevent your loved one from qualifying for state aid. It can also prevent them from making mistakes with an inheritance that could have lifelong repercussions.
You have reason to worry about taxes or debt after you die
Trusts protect the assets that you use to fund them by taking them out of your possession. Creditors usually cannot go after your trust assets for repayment. Putting assets in a trust can also help you qualify for Medicaid as you get older if you need it.
You have reason to worry about the family fighting over your assets
Maybe you have two children who have never gotten along, or perhaps you just have valuable property that might bring out the worst in family members who otherwise get along. If you think that your estate plan or last will might lead to challenges or family conflict, creating a trust can help reduce those issues.
Trusts are harder for people to challenge in court and also offer more nuanced and long-term control over the use of the assets that fund them. Creating a trust to benefit you in the future and can also protect the people you love. That makes considering a trust a good idea for many planning their estates.