When Do You Need a Trust?

I want to take a couple of minutes and talk about the topic of Trusts. You know I’m not an Estate Planning Attorney, obviously I’m a Financial Advisor. But we partner with them almost daily for our clients to make sure their estate planning needs are taken care of. You know one of the most common things I see them talking about and as long as people are wondering is when do I need a Trust? Do I need a Trust? When should I get one? All these various things. So from kind of experience in a lot of these situations and conversations with folks, there’s kind of four primary things or common things I see that rise up in a lot of cases when people should consider them or definitely have additional conversations. The first, estate taxes. You know some time ago the estate tax threshold used to be much lower. You know since them as of 2021 here the estate tax threshold for an individual $11.7M. So if you are under that you may not have to worry about estate taxes depending upon your situation. But you know that’s an area where some folks with planning may need to consider doing specific types of estate planning to try to minimize or avoid estate tax if possible. The other thing that’s out there is to avoid probate, right? You know you hear about that all of the time, you know people passing away and their assets or their estate going through a probate court situation. Well folks, all your possessions, you know whether that’s financial instruments, property, real estate, stuff, it needs to know where to go when you pass away. And if that asset doesn’t know where to go well, then it has to go through probate court so they can tell it where to go. So with estate planning through Trusts it can do that. So a very good, well rounded, properly executed estate plan would make it so most of or all of your assets don’t have to go through probate court. The other possible scenario where some advanced estate planning may need to take place is with a special needs child or special needs individual you’re caring for. You know in many cases they’re entitled to some sort of aid or disability or whatever it may be. And if they inherited a large sum of money from your passing, it may disrupt that and it may cause problems for them. And potentially it could cause it to where they won’t be allowed to receive that aid any further or for some time. So properly estate planning needs to be taken care of in those situations. And the last one I’m going to talk about today is for lack of a better term dictating from the grave. You know deciding where specifically your assets are going and when or how people can access them. So let me give you an example. Let’s say you have a child that maybe isn’t so great with money and you’re concerned about them inheriting a large sum of money that would be fully theirs and they’re fully in control of it one time. Well maybe you’re concerned they’re not going to spend that appropriately or the way maybe you would wish or that they’re going to blow it or not pay off bills or whatever the reasoning may be. So with estate planning you can set boundaries or controls of when they may have access to that money and how much or for what reason. So it’s a way for you to kind of put your wishes out there and make sure maybe that next generation is well taken care of for that situation. So if this is some of the questions you have or you’re wondering yourself what estate planning should be taken care, make sure you’re speaking with your financial professional and they’re incorporating that team together. If not, give us a call at the number on the screen, we’d love to help you.