Everyone needs a will, but, increasingly, estate planners say people also could benefit from setting up a trust while they are alive. That step would help assure that their assets are distributed more quickly, their bills paid promptly and continuously and personal information about property and other assets are kept out of the public eye.
You might think of a trust as something for wealthy people who want to dispose of high-end assets, like art work, collectible cars or businesses. However, just like everyone needs an estate plan regardless of their asset level, says The New York Times in the article, “Life After Death? Here’s Why You Should Have a Trust,” many people who are not wealthy could benefit from having a trust.
There are many different kinds of trusts which serve different purposes. One is a revocable trust, which the owner can change. They are considered by many to be the “work horse” of modern estate planning. A revocable trust can avoid the need for a public probate court proceeding after the person dies, saving time and keeping money from being immediately available to heirs and executors alike.
Trusts are also useful for times when people become incapacitated and need someone else to take care of their finances. Because many more people are living longer and the number of people with dementia is increasing, there are more situations where trusts are useful to the family and caregivers.
A will is different than a trust and is a public document. The probate process requires a disclosure of assets, bank and other financial accounts and the names of beneficiaries. That information remains private with a revocable trust.
Other considerations regarding trusts:
- You should have any type of trust set up by an elder law attorney.
- A house, real property, bank or investment accounts can be placed into a trust.
- A revocable trust does not always end at the death of the original owner. How long it may last depends upon the laws of your state.
- People also use trusts to protect their assets from others or to assure the long-term care of someone who is disabled.
- You can have a professional manager, family member or friend as a trustee or co-trustee of a trust. Sometimes having a licensed professional who has federal reporting requirements can provide an extra layer of protection.
Speak with an elder law attorney who can discuss the different types of trusts that are available and determine which one is best for your particular situation.
Reference: The New York Times (March 22, 2018) “Life After Death? Here’s Why You Should Have a Trust”