Who Needs a Trust?
Some people think that trusts are only for the wealthy. Trusts certainly may be recommended for their complex financial situations. Then there are those on the opposite end of the spectrum who believe everyone needs a trust, no matter what their situation, in order to avoid probate. Most can’t describe what it is that makes probate so undesirable, except that their friends, media, and advisors encourage this belief.
The truth lies somewhere in between. Trusts are not just for the wealthy nor is probate as awful as they say it is—at least not for simple, uncontested estates in Arizona. So, who needs a trust? For the average, middle class person, it depends more on the situation, such as:
- Minor beneficiaries
- Special needs / disabled beneficiaries
- Blended families
- More control / conditions
- Creditor/predator protection for beneficiaries
- Beneficiaries (or their spouses) financially irresponsible
- Substance abuse issues
- Property in other states
- Asset protection (Medicaid/VA long term care benefits)
- Disinherited heirs (avoid contests)
- Protect you in your old age from exploitation/scams
A couple with a house, car, 401k and small bank account may not think they need a trust, but if they have minor or special needs children, this is a second marriage, or they are disinheriting a next of kin, a trust may be an effective tool that with flexibility no other estate planning arrangement can offer. Estate planning should never be cookie-cutter trusts for all people, but crafted specifically for each person’s unique situation and preferences.
Do any of these situations apply to you? Let’s talk about your estate planning options, including whether a trust may be a good option for you.
