Q: I thought Trusts were for wealthy people. I don’t have a large estate. Why would I need one?
A: Trusts are not just for the very wealthy. Yes, certain types of trusts can be used to minimize estate tax liability for larger estates. However, the most common type of trust, commonly known as a revocable trust, also has other more practical advantages such as (1) avoiding probate and the ensuing costs and delays in probate administration at death; (2) ensuring a Successor Trustee of your choosing can manage affairs for you in the event of your later incapacity due to illness or injury, thereby avoiding a potential costly conservatorship court proceeding, and; (3) in cases of second marriages trust can be set up to provide for your surviving spouse’s financial support after your death, while ensuring that any of your assets remaining at your spouse’s death will be distributed to the heirs of your choosing (typically children of the first marriage). In short, when adequately drafted your trust can both protect your kids’ interest while still providing for your spouse after your death. This can save a lot of unintended hurt feelings among various family members, and potential litigation.