I get this question a lot when people learn that I practice estate planning. The answer is always it depends. Whether a trust is an essential – or even a useful – part of your estate plan depends on your estate planning needs and wants. Both a trust and a will allow you to name the beneficiaries of your assets.
Trusts can meet several needs as part of a comprehensive estate plan, and people use one or more trusts as part of their estate plans for a number of reasons. High net-worth families may use a trust to avoid or lessen their estate tax liability.
Many people use a trust to care for someone with special needs. If done properly, a special needs trust can provide for the care of someone with special needs without the special-needs individual losing eligibility for government benefits. A trust can also be useful to provide for the care of minor children or even as part of a family business succession plan. Parents can direct how money is held for the benefit of their minor children. Other people use trusts to avoid probate, which can be beneficial if they own real estate in multiple states.
There are some reasons why a person may want a will instead of a trust – or in addition to a trust. For example, parents cannot name a guardian for their minor children in a trust; they can only name their children’s guardian in a will. Moreover, a trust is usually more expensive to prepare than a will because there is more work involved in preparing a trust.
Your needs are different from everyone else’s. Contact me today at 240-638-2721 or firstname.lastname@example.org for an appointment so that I help you with your unique estate planning needs.