Do you Need a Trust?
A trust is a document that says what you want done with the assets for your beneficiaries (heirs) when you die.
You can retain full control of the trust (your assets) while you are living. This would be called a “revocable trust”; or, you can choose to not have control over it, called an “irrevocable trust.” There are various reasons to choose one or the other. An example would be for liability purposes, if you are being sued, or are in a position where you are at risk of being sued and you want to protect your assets. An adult who is disabled and can’t take care of himself/herself might also need an irrevocable trust to qualify for certain medical benefits.
Do I Need a Trust?
If you answered no to all of these questions, you need an estate plan!
- Do you know whether your property will end up in a court proceeding (probate) before it passes to your heirs?
- Does your family know whether you want to be buried or cremated?
- Do you know who will have the power to make decisions for you if you become incapacitated?
- Do you know who will take care of your children if you pass?
- Do you know what will happen to your business if you pass?
Trust vs. Will
The main difference between a trust and a will is that with a trust, you can avoid probate and it is a private document. Only you and the people you allow can have access to the trust. With a will, the document would have to be filed in Court in a probate action. Then, the Judge would decide whether to approve the will or not. This process is public, which allows anyone (relatives, bill collectors, strangers) to file a claim against your estate. Your estate being all your assets.
If you do not have a trust:
- There would have to be a probate action in order for your heirs to collect their share of their assets. This would take anywhere from 4-6 months (if uncontested) for the assets to be distributed
- The cost would be a percentage of all of your assets, usually $7,500 or more
- If you own real property in other states, there would have to be a probate action in each state for your heirs to collect their property