The simplest solution isn’t always the best one. Especially when it comes to making complicated decisions with long-term implications for others, sometimes embracing complexity benefits everyone.
Quite a few people engaged in estate planning shy away from trusts simply because they are more complicated than a simple last will. However, trusts give you control and protection that a last will simply doesn’t offer. There are at least three common reasons to consider using a trust.
You expect to be in debt or have medical needs as you age
Even if you have tried to plan for your retirement, you may not have enough money set aside or long-term care insurance to cover the costs of nursing home residency. A trust could allow you to qualify for Medicaid and will protect your assets from claims both by insurance companies and creditors after you die.
You have a family member with special needs
Whether you have a child who got hurt in a car crash and can no longer live independently or a loved one born with a disability, you may need to create a special needs trust to protect them after you die. A trust can give them financial resources without cutting them off from state benefits as they grow older. A trust also protects them from financial abuse which could be a risk if they inherit a large amount at once.
You want to leave an uneven inheritance or give money to charity
Maybe you want to disinherit one of your three children, have always dreamed of funding a scholarship or want to give money to the local parks. If you won’t leave everything to those closest to you or if you intended to divide your assets unevenly, the risk of your family challenging your wishes increases.
Other reasons people may consider a trust include to limit their tax liability, control assets for multiple generations after they die or protect loved ones from the downfall of a lump-sum inheritance. Getting professional help now in creating a trust will give you peace of mind and your loved ones security after you die.