People who are planning how to handle their estates and assets may find that setting up a trust may provide several important advantages to them, depending on the complexity of their estates and the goals that they have. Trusts may present an important tool that people can use in order to accomplish several different things.
Trusts may be used to provide for a disabled relative. Certain categories of expenses that are not covered by disability benefits or Medicaid may be paid on behalf of the disabled relative by the trust without impacting their continued disability benefits eligibility. Other people set up trusts to provide themselves with better protection against their assets being seized to settle lawsuits, while still others choose trusts in order to avoid the associated publicity and high fees of the probate process.
Certain trusts may be established to reduce estate and gift taxes that would otherwise accrue if the contained assets went through probate. Trusts may also be set up in a way that conditions disbursements upon the beneficiary's meeting certain contingencies such as reaching a certain age, graduating from college and so on. Trusts are highly flexible and varied and can be designed to accomplish different estate goals.
People who have specific needs or highly complex estates with significant holdings in real estate or antiques may benefit by choosing to form a trust suited for their purposes. They may wish to speak with their estate planning attorney about the advisability of a trust in their particular case. An attorney may be able to help his or her clients choose whether to set up a trust and may be able to help set up one in a manner that is individually suited for his or her clients' particular goals.
Source: CNN Money, "Estate planning: Is a trust beneficial?", November 25, 2014