When Does It Make Sense to Use a Family Trust?

September 1, 2021

A family trust is most appropriate as an estate planning tool when you live in a state where probate is very difficult. This is also beneficial for those people who are interested in keeping information about their assets and beneficiaries private, those who have a large estate or a significant number of assets and those who want to provide for the management of their assets in the event that they become incapacitated.

There are several other types of situations in which a family trust might be the appropriate thing to create with the support of an estate planning attorney. These include:

  • For divorce and creditor protection of those assets to be distributed to a beneficiary.
  • To help provide for disabled beneficiaries who still need to qualify for government benefits.
  • For the time efficiency and cost reduction benefits over the traditional probate process.
  • For tax planning options when the estate size is big enough to incur significant federal or state taxes.

A family trust can also be used in conjunction with other estate planning strategies like a will. Every person and adult family member should have a will but they leave plenty to be desired if you have a more complicated family or estate situation.

When you are looking to plan for minor children, for example, a will is a preferred estate planning tool since you can name a guardian to step in and take care of your children if something were to happen to you. Make sure that you have consulted with an experienced and knowledgeable estate planning lawyer for more information on how to align this with your needs.

 


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