Trusts are not exclusive to the elite.
Trusts have a reputation for being for the wealthy.
The middle class must pass their assets through a will.
This is the just nature of life.
According to a recent Barron article titled “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich,” a trust does more than protect massive wealth.
This means it could be a useful tool for anyone, depending on their goals.
Although there are a number of types of trust, the revocable living trust is common.
It allows the grantor (you) to provide detailed instructions on how and when you would like your assets distributed to your beneficiaries after you die.
Because it is a trust, it also provide greater privacy and can bypass the probate proceedings.
In other words, it can help settle your estate more quickly and efficiently.
An experienced estate planning attorney can set up a trust and help you retitle your probate-eligible assets to the trust.
Often times, a pour-over will is also used to collect any additional assets into the trust.
Remember, insurance policies and retirement accounts are already not subject to probate because they pass through beneficiary designations.
Nevertheless, consult with your estate planning attorney regarding who (or what) should be the primary and contingent beneficiaries according to your estate distribution wishes.
Are there other benefits to this trust?
With a revocable living trust, you retain control while you are alive and can alter it or revoke it as you see fit.
For minor children, it can provide guidelines for the ages and conditions when all or part of the inheritance is to be dispersed.
If you have a blended family, it can provide greater clarification to avoid accidentally disinheriting a loved one or passing an heirloom to the wrong family member.
The downside is there is no tax benefit to a revocable living trust as it remains part of your estate.
In order to get this benefit, you would need an irrevocable trust.
These are more difficult to change or cancel.
Work with an experienced estate planning attorney to determine if a trust is the right choice for you and your loved ones.
During the meeting be sure to get your whole estate plan in place with your will, advance health care directive, and general durable power of attorney for financial matters.
Your loved ones will appreciate your intentionality.
Reference: Barron’s (February 23, 2019) “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich”