Having a trust sounds like something that only wealthy people need, but trusts are useful estate planning tools for regular folks too. Trusts foster better control over how assets are distributed among beneficiaries. When properly designed, trusts can also ensure that your estate does not pass through probate, which is expensive, time consuming and public. Certain trusts are used to protect your estate from lawsuits or creditors, or even long term care expenses. Even though a smaller percentage of Americans are now subject to estate taxes, these laws change, so setting up trusts now may prevent problems in the future.
There is a lot of good advice in an article that appeared in The Bryan County (GA) News, “What should you know about trusts.” One basic fact: it is important to work with an experienced estate planning attorney to evaluate your needs and to set up any trusts. Trusts are very effective, but they are also very complex. Not all attorneys have the extra training and legal acumen to design and administer trusts. Make sure that any attorney you meet with has the right training and experience in this area of the law.
Selecting a trustee is an important decision, as he or she is legally bound to manage the trust’s assets for your beneficiaries. Before you select your oldest daughter or another family member, ask these questions:
- Does he or she have the experience and knowledge to manage your financial affairs in a competent manner?
- If she must make a decision that may impact family members, will she act in a fair and unbiased manner?
- Will naming a family member as trustee create issues for the family?
- Does your prospective trustee have the time to manage your trust?
- Does she want this major responsibility?
- Do you have another person in mind to serve as trustee if the trustee you selected can’t do it?
Give considerable thought into who you ask to take on these roles. You can also ask a financial institution to serve as trustee, but be sure to inquire about costs and the services they provide.
Once you start these plans, it’s a good idea to talk to your family and other beneficiaries of your estate about your wishes. People get hurt feelings if they have no idea what to expect. Get your loved ones on board with your estate plan so that you’ll feel even more comfortable in putting your plans in place.
Reference: Bryan County (GA) News (August 2, 2015) “What should you know about trusts”