Do I need a trust?

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Clients must have trusts explained in order to know if one is advisable. 

A trust is a set of directions that dictate how your property is to be managed during your lifetime and after your death.  A revocable trust includes the ability for you to change the provisions of your trust.

Trusts are legal tools designed to solve legal problems.  So the first question is what legal problem are we trying to address.  Some people think that they need a trust because a friend or neighbor told them that they do.  However, when their assets are investigated, it may be that they do not have assets that are suitable to fund to a revocable living trust.  If a person’s primary assets are retirement funds and a Florida homestead, then it may make little sense to prepare and pay for a trust.

If however, a person has a taxable estate, trusts are often needed to minimize taxation. If a client has a taxable estate, he or she must have trusts explained so that he or she can understand how they minimize taxes.

In 2018 a decedent would have to have in excess of $11,180,000 to have a taxable estate.  Trusts are also advisable if a person has a beneficiary with special needs, whose government benefits would be at risk if assets were left directly to the special needs beneficiary.  Revocable living trusts are also advisable if a person owns property in more than one state to avoid multiple probate administrations.

Certain types of trusts are advisable if planning in advance for long term care and possible government benefits such as Medicaid and VA benefits.  Clients need trusts explained to understand how they can help in these situations.

Revocable living trusts are NOT the appropriate type of trust to use if benefits is the goal.

Trusts are powerful instruments that can solve a variety of problems.

Unfortunately, however, many people have been convinced that they need a revocable living trust merely to avoid probate.  Having trusts explained will help the public understand what they can and cannot do.

Probate administration is a relatively minor concern when looking at the big picture of aging any paying for long term care.

Also, many individuals complete revocable living trusts but never funds their assets to the trusts so the trusts do not even accomplish the intended purpose of avoiding probate.

Please give us a call if you are contemplating legal documents so that we can discuss with you some of the critical issues that you should be considering when thinking about your legal documents and your future.