Are Trusts Only for Rich People?

Older couple smiling laughing and enjoying their time on the water.

A common misconception about estate planning is that trusts are only for rich people. The truth is that many people with modest assets can benefit from including a trust in their estate plan. To determine whether a trust can help you — and what kind of trust is appropriate — it’s essential to talk with a knowledgeable estate planning lawyer who understands trusts.

What Does a Trust Accomplish?

There are many types of trusts. A trust can accomplish many different estate planning goals and provide significant benefits as part of an estate plan, regardless of how many assets a person has. Trusts are a flexible and versatile tool that can help you provide for a better future for yourself and your family.

While wealthy people often use trusts for tax purposes, a trust can provide other significant benefits as well. In fact, individuals and married couples of modest means, who worked hard all their lives to provide for themselves later in life and for their loved ones after they pass away, frequently benefit from setting up a trust.

Preserving Assets Late in Life

A trust can help preserve your assets in the later stages of your life, which can mean that you have more resources to take care of your own needs and to pass along to your loved ones. Trusts are an important tool in planning for nursing home costs and in protecting assets from unexpected liability and claims. Creating a trust sometimes helps an individual qualify for Medicaid benefits for long-term care and protect the family home when a family member enters a nursing home.

Protecting Your Family Legacy for Children and Grandchildren

Many individuals and married couples have concerns about protecting their family legacy, so that children and grandchildren can benefit from the legacy in the future. Establishing a trust is one of the best ways to address this concern. When you protect and preserve your family legacy with a trust, you are in complete control of how and when the assets will be distributed. Your specific wishes are integrated into the terms of the trust.

If you leave your estate to your loved ones using a last will and testament, they receive full control of the assets immediately when the property is distributed. That can lead to all kinds of problems. A financially irresponsible beneficiary can waste or give away their entire inheritance. The assets can be reached by a beneficiary’s creditors or subject to other types of liability. Non-family members like former spouses of children can claim the right to the assets, so that nothing ever reaches your grandchildren.

You can prevent all those issues by establishing a trust for your children and grandchildren. When you create the trust, you control distribution of the property by the provisions in the trust document. You can provide for payments to beneficiaries over a period of time or for specific purposes (like your grandchildren’s education or other needs), address management of assets for minor children or grandchildren, and specify other appropriate terms for payments to the trust beneficiaries.

A trust can also protect property in the event of late life remarriage or in a situation involving a blended family with children from previous marriages. Without a trust, a family legacy may end up in the hands of a stranger or otherwise be depleted before it reaches the intended beneficiaries.

Finally, if your assets include an IRA or 401(k) retirement account, a trust can address concerns created by recent changes in the law. Creating a retirement account trust can minimize the impact of the new laws and ensure that your loved ones receive the maximum possible benefit from your hard-earned retirement savings.

Avoiding Probate of Your Estate

Probate is a legal process that many Georgia estates must complete. It takes time, involves costs and expenses, and makes the financial details of the estate publicly available. Property distributed in a last will and testament almost always goes through probate. But you can avoid probate entirely with a properly structured, executed, and funded trust.

If you establish a trust to avoid probate, your beneficiaries receive their inheritance sooner, the costs and fees of estate administration are less, and your financial information remains private and unavailable for public scrutiny. If those concerns are part of your estate planning goals, you should talk with an estate planning lawyer about including a trust in your estate.

Determining Whether You Can Benefit from a Trust

The only right way to determine whether you can benefit from including a trust in your estate plan is to discuss your situation and your goals with an experienced estate planning lawyer. Just as you should never attempt to create a will on your own, you should never make a decision about a trust or try to establish one without assistance from a knowledgeable attorney. Do-it-yourself estate planning documents create substantial risks for you and your loved ones.

Your estate planning lawyer takes the time to understand your personal and financial circumstances and your wishes for the future for yourself and your family. Only after evaluating all those considerations, your attorney helps you decide on the right structure for your estate plan. Then, your lawyer creates 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 a place an estate plan that provides the protection you want and need.

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.

Categories: Estate Planning