Are Trusts Only for Rich People?

People often think that trusts are only for individuals with a high net worth. While trusts may help rich people minimize their taxes, a trust can also provide other significant estate planning benefits for individuals and married couples with more modest means. The decision to establish a trust should be based on much more than the amount of your financial assets. Your family situation and dynamics, the nature of your assets, and your legacy goals should also be considered in deciding whether a trust would be beneficial — or even essential — to ensure future financial security for you and your family.

How a Trust Works

A trust is a legal fiduciary arrangement created by execution of a trust document, which should be drafted by an experienced estate planning attorney to reflect your personal and financial needs and goals. The document establishes the trust, states the objectives and purposes, provides the terms for trust administration and management, and designates a trustee and the beneficiary(ies) of the trust. After the trust is funded and operational, the trustee manages and distributes the trust assets according to the provisions of the trust document.

There are many different types of trusts, each of which accomplishes specific goals, as determined by the grantor (person creating the trust) in consultation with an estate planning attorney. While a trust is not required for every estate plan, many individuals — even those of modest financial means — can benefit substantially from establishing a trust. A comprehensive estate plan often includes a trust as a core component of protecting and managing assets.

Different Types of Trusts

Minimizing taxes certainly is one reason for setting up a trust, but there are other critical goals that a trust can accomplish as well. There are five primary situations in which a trust can be beneficial as part of an estate plan, regardless of the value of an estate:

1. Enabling qualification for assistance with long-term medical costs;
2. Providing marital protection for a surviving spouse on the death of the first spouse;
3. Protecting a loved one with special needs;
4. Providing asset protection for your family legacy during your lifetime and/or your children’s lifetime;
5. Avoiding ancillary probate for real property ownership in more than one state.

Another reason for including a trust in an estate plan is to avoid probate of an estate. Including a trust in an estate plan can save time and expenses in estate administration, enable the sale of real property sooner, and maintain the privacy of the financial details of the estate and confidentiality of the beneficiary information.

A trust can be revocable or irrevocable, based on the purpose of establishing it and the laws and regulations that apply to the trust. The nature of a trust is determined by the trust document. Creating the proper type of trust is one of the most important reasons to rely on an experienced estate planning attorney. You should never attempt to create a trust or an estate plan without assistance from a knowledgeable legal professional.

Who Can Benefit From Establishing a Trust?

The decision whether to include a trust in your estate plan should be made in discussions with your estate planning attorney. The details of your personal, business, and financial circumstances must be taken into account, together with your short-term and longer-term goals for yourself and for your loved ones.

Your estate planning lawyer takes the time to understand your situation and your wishes for the future for yourself and your family. After evaluating all those considerations, your attorney helps you explore the available options and decide on the right structure for your estate plan before creating estate planning documents that comply with all the legal requirements. When you get help from an estate planning attorney, you have the peace of mind that you have put in place an estate plan that provides the protection you want and need.

You do not need to have millions of dollars in assets to benefit from creating a trust. Even if your financial assets are a modest amount, a trust may well be the best way to accomplish asset protection, probate avoidance, and other estate planning goals. The flexibility and valuable nature of trusts extend to everyone who creates an estate plan. Trusts are not only for individuals and couples with high net worth.

Talk With an Experienced Georgia Estate Planning Attorney

Our Cartersville estate planning practice at Asset Protection & Elder Law of Georgia focuses on helping clients find the right solutions for all their concerns involving their assets, families, and estates. Determining whether a trust can provide benefits for a client and their loved ones is an important part of our legal services. We serve clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County. To schedule a consultation, call us at (770) 382-0984 or contact us through our online form.