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Limited wealth? A trust might still make sense for you.

Clients often ask, “How do I decide if I need a trust instead of simply a will?” People tend to assume trusts are only for the wealthy. In fact, there are instances where a revocable living trust can be quite useful for anyone. Here are some factors to consider when deciding if you might need a trust.

A revocable living trust can help you if you’re incapacitated later in life. You could name a successor or disability trustee in the trust agreement. If you were to become incapacitated, the disability trustee would be empowered to administer the trust. A well-drafted trust can also provide for the care of a disabled beneficiary.

With a living trust and a corporate trustee, you can gain professional investment management. This enables you to grow your assets now and to provide for your beneficiaries after you pass away. Within your trust document you can provide clear direction about how your assets are to be disbursed to family members, including planning for minor beneficiaries, and even delaying disbursements well into the future.

There’s also the matter of avoiding probate. Probate is essentially the legal process of estate administration. If you use a will to direct the transfer of assets held in your name alone, the will must be admitted to probate. The estate must be probated before your heirs receive their inheritances. This is a time-consuming process and it can be costly. You can potentially avoid probate and the drawbacks that go along with it by using a revocable living trust to direct future asset transfers.

If you’re in a second or later marriage and you and your spouse have different beneficiaries, establishing trusts might ensure that each estate will go where he or she wants it to go outside of the probate process.

If you own real estate in more than one state, you could consider deeding the out-of-state property into your revocable living trust. Otherwise, your family may be faced with several separate probate estates – one in the state where you live, and another in the state where your real estate is located.

If you’re married, and the estates of you and your spouse could exceed the federal estate tax exemption ($13.61 million per individual in 2024), or your state’s estate tax exemption, you might consider establishing a trust to take advantage of both spouses’ exemptions from estate taxes.

If you find yourself considering a trust, talk to an attorney who specializes in estate planning. An effective trust begins with documentation carefully drafted by an attorney with knowledge of your specific situation and current legislation. Once your trust is established be sure to update your beneficiary designations and talk to your attorney about whether you should re-title some of your assets into the trust.

If you still have questions about whether a trust might be right for you, give us a call at 740.349.3900 and we’ll be happy to help.


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