ESTATE PLANNING MYTH #2: Only Millionaires Need Trusts
Let's talk about trusts
What do you think when you hear the word “trust”? Yachts and the Hamptons? Luckily for most of us, you don’t need to have millions of dollars in order to make a trust beneficial.
Here are some reasons you might want a trust:
- You want to avoid probate.
Even in the best cases, probate is a headache and makes an already difficult time even worse. If you use a trust properly, your heirs can successfully avoid having to go through the probate process to settle your estate after you pass away.
- You want to control distribution.
Maybe you have a child who isn’t great with money but you don’t want to exclude them. With a trust, you can distribute their inheritance to them in stages or only for specific purposes to help them make good financial decisions.
- Your heirs are minors.
Minors can’t inherit property outright. Due to state law, any inheritance left to a minor will have to have someone to guard and manage the money until the child is 18. A trust can avoid additional court proceedings and paperwork. The trust holds onto the assets until the child is an adult; it can also distribute amounts for the child’s well-being before they reach adulthood.
- You’ve remarried.
Some people marry and have children and then divorce or their spouse passes away. They remarry and gain a whole new family of adult stepchildren. Often in these cases, individuals want their spouses cared for but they want their assets to ultimately go to their biological children rather than their stepchildren. A trust can ensure that a spouse is cared for and has access to everything they need while still dictating what happens to those assets after the surviving spouse passes away.
Families and financial situations are unique and complicated. Estate planning should put your mind at ease and make life simpler. A trust can help accomplish that—even if you’re not a millionaire.