A trust can be a useful estate-planning tool for lots of people — not just billionaires. Is a trust right for you? There are two main reasons why you would consider creating one. One is that you have a net worth of at least $100,000, a substantial amount of which is in real estate. The other is that you have very specific instructions on how and when you want your estate to be distributed among your heirs after you die. Trusts also are great for protecting your estate from lawsuits and creditors.
It’s well documented that most people do not do estate planning. Of people who do, most use a last will to pass their estates to a spouse or divide it among their children. Most don’t establish a trust, but if you want multiple heirs to share your assets after your death, your plan will benefit from a trust.
Here are other reasons to set up a trust:
- To protect beneficiaries.
- To avoid court-supervised probate of trust assets and protect your estate’s privacy.
- To protect premarital assets in the event of a divorce.
- To set aside funds to support you if you become incapacitated.
- To manage indivisible assets such as vacation homes and recreational vehicles.
- To manage closely held business assets for planned business succession.
- To hold life insurance policies.
- To efficiently give to charities.
- To provide money for a disabled person without making them ineligible for Medicaid.
Work with professionals
Trusts are flexible, varied and complex. Each type has advantages and disadvantages, Assets you want protected by the trust must be retitled in the name of the trust. Anything that’s not titled to the trust when you die will have to go through probate. The trust document gives you, another person or an institution the power to hold and manage your money for your benefit or the benefit of other people.
Let us know if you’d like to discuss how a trust may help you. Contact us at 703-218-3600 or click here. To review our personal financial planning articles, click here. To review our real estate articles, click here. To learn more about MCB’s real estate practice and our real estate experts, click here. To learn more about MCB’s tax practice and our tax experts, click here.
Subscribe to the MCB Blog and get all new MCB blog posts sent directly to your inbox.
©2022