5 Top Reasons People Have Trusts

5 Top Reasons People Have Trusts

Do you need a trust? Can a trust be useful for you? There are many reasons you could have a trust but whether you really need a trust depends upon your personal situation. First, not everybody needs trust. Meaning: a person should first own something of value, like real estate property or money to put into a trust. Second, trusts are not magic answers to personal tax issues or legal protection shields for unlawful activity.living trust and estate planning law

As an estate planning attorney in Atlanta who a) helps clients control their legacy with trusts and wills, and b) guides clients through the probate process, I bring you the top reasons, in my experience, why clients have established trusts.

  • Trusts simplify the estate plan – often, the client, an elder couple or single person, who has already experienced the probate of a close family member’s estate, asks for help forming a trust so that their spouse or children will not have to deal with the often-difficult probate process. Often the trust client describes their probate experience as unpleasant, long, and complex, and sometimes that there was a family fight. Often the parent-clients say that they want to make the handling of their estate “easy” on their children through the use of a trust. When drafted, or crafted, correctly, a trust can help avoid probate and allow a person’s legacy (including houses, cars, investments, businesses, insurance, etc.) to pass through the trust to the surviving family.
  • Trusts avoid probate, save time, save money – You may save money with a trust that would eliminate the need for probate by using a trust as the centerpiece of your estate plan instead of a will. The basic theory is that if the trust is properly set up during lifetime, then all the property of the deceased can be transferred to the surviving family without the probate court’s involvement or the need to “file for probate.” So, the couple that avoids the probate of each other’s estate by setting up a family trust at a reasonable cost, saves money that would have been spent on both probates. Also, the time and anxiety costs to deal with probate sometimes run high; that is much of what people are trying to avoid when they want to avoid probate.
  • Trusts keep private matters private – When somebody dies, owning property (e.g. real estate, investment accounts, etc.) with a Last Will and Testament naming an executor, that Will must be filed in the decedent’s home county. That file is a public file found at the probate court. If there is a fight over the will, then that fight – like a will contest or accounting dispute – would be available to the public. Instead, if there is a Trust that is set up correctly, there would be no public filing of the trust anywhere, and there would be no need for a probate court to “approve” the previously-set Trust arrangement.
  • Trusts make special arrangements for special needs and unique family situations – This answer itself is a quite expansive topic that should be the subject of a future column. Whether it is an unequal giving of a legacy by a parent to one’s children or the “special needs” of a beneficiary who needs a trustee to manage and distribute the family legacy over a long time, trusts are special arrangements that can be made to fit unique situations.

When deciding if a trust is right for you, it is important to ask questions and gather useful information to make the best decisions for you and your family. Once you have decided on completing your estate plan, I strongly suggest working with an attorney for wills and trusts, unless you would rather leave your legacy to Chance and Hope.

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