Once you’ve gotten a clear understanding of the basics needed for an effective estate plan, it’s time to turn your attention to how a trust may or may not work for your estate, reports The Daily Sentinel in the article “Are you prepared for threats to your estate?” As the title indicates, this article looks at how trusts are used within estate planning to address problems.
Your will ensures that assets go to the people you want to receive them. However, a traditional will may not anticipate circumstances in which these assets are transferred. It’s often up to the personal representative to make sure assets are distributed as soon as possible to heirs. Circumstances often arise that cause delays.
In comparison, the proper use of a trust helps ensure that your assets are distributed to the person(s) you want, when you want. The goal of a well-drafted trust is to protect you, your estate and the beneficiaries from unwanted outcomes.
Here’s an example: what if one of your children is facing bankruptcy when you die? Will your assets be available to help them get back on their feet, or will they be completely used up to pay off their debts? If you have a trust in place, there will be a legal layer of protection between your child and their creditors.
Here are a few other ways trusts can protect your legacy and your family:
- If your spouse predeceases you and you are incapacitated from a stroke, a fall or other illness, a trust can be used to ensure that your assets are used to take care of your needs.
- Seniors, especially those who have lost a spouse, tend to be vulnerable to scams, from people they know, and strangers who connect with them through telephone or email. A trust can place another set of eyes on the funds and requires a second (or even third) person to release funds.
- If children have issues, like the example above, or other problems, like divorces, opioid addictions or other problems, a trust can protect your estate from being consumed for all the wrong reasons. In many situations, sadly, your family members need to be protected against themselves.
Every family is different, and every family has its own challenges. However, if your situation includes serious challenges, you’ll want to sit down with a local estate planning attorney and talk about how your estate plan can protect your family.
When there are difficult situations in the family, you will want to be completely honest and above board with the attorney. He will only be able to help you, if he knows exactly what you are anticipating.
Not every family’s situation can be solved, and not every family needs to have property placed in trust. However, this is an option that an informed legal consumer needs to know about, when they are starting to work on their estate plan.
One last thought: if your family situation is so overwhelming that you feel like doing nothing, think again. If you don’t have an estate plan in place, a family with challenges will not suddenly rise to the occasion. Your decades of work may be squandered, adult children may have to spend more money in the court system than you would have wanted, and your legacy may evaporate. Speak with an attorney today and start the process to protect yourself, your loved ones, and yes, your legacy.
Reference: The Daily Sentinel (Dec. 1, 2018) “Are you prepared for threats to your estate?”