Do You Need A Living Trust?

A common question for many people coming into my office to discuss estate planning is “Do I need a living trust?”  My usual response is that it depends (a favorite response of most lawyers).  Well, in this case, it really does depend.  Here are a few factors?

#1  What is the value of your estate?  If your estate is worth more than $500,000 (assets – liabilities) you are a candidate for a living trust.  Why?  The more you have the more you can protect with a trust.  Oh, and when figuring your net worth, don’t forget to include any potential inheritances from your family.

#2  How many titled assets do you have?  Just as important as the value of your assets is the number of them.  Case in point:  I have had clients who have $500,000 spread between three cars, two homes, a boat, two trailers, six bank accounts, an online investing account, two retirement accounts and the certificated stock of five companies.  These are all titled assets and the more assets you have the more sense it makes to have a trust.

#3  Are you concerned about your beneficiaries blowing their inheritance?  If you pass away with or without a will, everything is going to pass relatively immediately to your beneficiaries through the probate process.  Is that what you want for your children?  Do you trust them to take the windfall of your legacy to them and invest it to improve their lives or are you afraid they will waste the money (and opportunity) your legacy provides.  Make no mistake, an inheritance is an opportunity.  With a trust, you can ensure that a trustee manages the inheritance of your beneficiary for as long as is necessary to provide you peace of mind.  One tip…do a life chapters distribution.  Give some of the principal at one age and so much of it a few years later.  This is the real value of a trust.  It protects beneficiaries from themselves.

#4  Are you concerned about estate taxes? Unless you are very rich at the moment, estate taxes are probably not a concern.  Notice I said “at the moment”…that’s because estate taxes change over time.  Until recently, the estate tax affected many more people.  You want the ability to adjust your trust to take advantage of and/or plan for the latest changes in the estate tax.

#5  Is privacy important to you?  A will is a public document filed in probate court of the county where the decedent was living when they passed away.  Open for public inspection at any time.  A trust, on the other hand, is a private document, and is not filed with the court.  You want privacy?  A trust is the only document that can give you that.

Just a few considerations.  There are many factors that go into whether or not you need a trust.  Our office can meet with you and make that determination pretty quick and explain why.  If you live in O’Fallon, Lake St. Louis, St. Peters or St. Charles, give us a call today.