Advantages and Dangers of Having a Trust
Updated: Aug 20, 2019
Why do people create Trusts? There are several advantages to having a Trust, depending on your assets and circumstances and the Trust’s term and funding. If you become incapacitated, a Trust can avoid the need to appoint a guardian over your assets.
Revocable and Irrevocable Trusts keep your estate plan confidential because those Trusts, unlike Wills, are not made a part of the public record. Trusts allow you to plan for the disposition of your assets over an extended period of time. They can also avoid probate if you have out-of-state real estate.
Another key reason people create Trusts is its advantages for those with minor beneficiaries. When a minor inherits property outright, the Court must appoint a guardian over the estate during the child’s minority. This need can be eliminated using a Trust.
Also, Trusts can provide for the management of assets until the beneficiary reaches a designated age. In some cases, families have relatives who are disabled. These families can utilize a Trust to help provide for their needs while protecting any public assistance benefits they may already be receiving.
Now that we’ve considered some of the advantages to having a Trust, let’s discuss some of the dangers. There are many people or businesses who try to sell Trust packages under a variety of names or programs. They may try to say that this package will allow you the opportunity to protect your assets from the Court, nursing home, or tax collector.
However, you must be very careful when responding to those programs. Most of these programs are sold by non-lawyers whose goal is to sell you a product, even if you don’t need it. For many people, a Trust is unnecessary and would then be a waste of money. For others, though, they have real circumstances or desires that would require creating a Trust.
If you think you need a Trust, you should consult with an estate planning attorney. Trusts are legal documents that can affect your taxes, estate plan, and other financial matters. Thus, you should discuss your circumstances and needs with a reputable attorney who can help you decide whether or not you really need a Trust.