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In previous posts, we looked at some of the differences between a will and trust and concluded that although a will is generally always necessary, a trust might not be.  Some of the more insightful readers of this blog probably left thinking, “that was helpful information but still didn’t answer my question: do I need a trust?”  This week we’ll look at some factors that go into making just that decision.

        My go-to answer for whether or not clients need a trust is that they don’t . . . unless they do.  A trust can be a very helpful tool for a lot of reasons, but if there’s no compelling reason to set one up, it’s better to put that time and money into something else.  However, there are many situations in which a trust can be useful, any one of which might be a valid enough reason for creating one.  Here are five factors to consider when evaluating the need for a trust.

1. Age

Younger clients looking to protect their families and minor children can often accomplish those objectives with a will.  Clients aged sixty or over should consider a trust.  There is simply a greater likelihood of the will becoming effective sooner and the clarity a trust can provide, in addition to the convenience of avoiding probate, can be a compelling reason to get one.

2. Concern About Incapacity

Healthier clients, or those with no family history of dementia or Alzheimer’s, might not need the specificity of a trust.  For clients with mental health issues on the horizon, a trust allows them to appoint successor trustees to more easily take control of financial decision-making when they become unable.

3. Concern About Probate

Virginia residents are lucky – we have a fairly straightforward and inexpensive probate process.  The tax rate is ten cents for every $100 of probate assets.  But do you know what’s cheaper and easier than Virginia’s probate process?  No probate process.  For clients who wish to avoid the time and expense of probate altogether, a trust is usually the answer.

4. Family Situation

Many clients have simple, nuclear family units with two parents and 2.4 children whom the parents wish to divide their estate equally.  For blended families, parents with step-children or children from previous relationships, or individuals with no children but other family members they wish to provide for, a trust can provide the flexibility to address competing needs and provide for beneficiaries in the exact way the client desires.

5. Desire for Privacy

Similarly to clients with complex family situations, a desire for privacy can be a strong motivator for a trust.  Some clients have estranged family members and want to avoid the conflict sure to develop when those individuals see how much they won’t be inheriting.  Properly funding a trust and keeping those assets out of probate is one way to protect family harmony in cases such as this.

Every client is unique and deserves individual attention to their wishes and estate planning needs.  Because no one-size-fits-all approach will work for everyone, clients with some of the circumstances discussed above can benefit from the increased specificity and flexibility a trust can provide.  Contact Asurest today to discuss what might be best for you.


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Disclaimer: This material is intended for general information purposes only and does not constitute legal advice.  Responses to inquiries, whether by email, telephone, or other means, do not constitute legal advice, nor do they create or imply the existence of an attorney-client relationship.