Should you consider creating more than one trust?
Individuals and families in Massachusetts and nationally that are thoughtfully focused upon estate planning often have numerous questions regarding trusts. These are important questions with many different answers, all depending on a person or family’s unique situation. There are many types of trusts, with the instrument collectively commanding a broad-based utility. That is, trusts can be employed as impressively flexible legal tools to promote any number of key planning goals. In other words, a trust can serve you and your beneficiaries in more than one way.
Before we explain when and why someone should have multiple trusts, let’s go over some of the basics involved in estate planning and establishing trusts.
Trusts can benefit any family or estate
Your intentions, desires, and financial situation can determine what kind of trust you want to establish. Trusts are not just for those with large estates. They’re there for everybody and they can help your loved ones avoid tricky situations down the road. What do we mean by ‘trusts are there for everybody?’ Well, believe it or not, trusts are not just for the descendants of someone who has passed. They can benefit you now and in the future. Trusts can help you secure your standard of living. In case of incapacitation due to old age or health issues setting up specific trusts, can guarantee that your standard of living remains secure. Trusts can even be used to secure your access to medicare. We’ve previously written about the impressive utility of trusts.
What are some common types of trusts?
Let’s go over some of the common types of trusts and what they mean. We like to preface any legal information on this website with the following recommendation: Without a dedicated consultation we cannot advise you on what legal steps you should take to safeguard your assets. Everybody’s family, financial, and legal situations are different. However, we love informing people about the basic overview of estate planning and what it entails.
This option is ideal for those who have made firm decisions regarding estate planning and are looking to safeguard their assets from estate taxes and creditors.
This is a flexible option which helps families avoid probate.
This is a type of living trust that can either be revocable or irrevocable. By creating a family trust, you are setting up a system for your family members to inherit your assets.
There’s more types of trusts, however these are some of the most common ones.
Is having more than one trust possible?
Yes, having more than one type of trust is possible and some people like to create multiple trusts to safeguard their future and assets.
A reader recently posed a fundamental question to a trust-focused columnist that we think merits spotlighting in today’s post.
That question was straightforward: Can a planner establish more than one trust?
It’s a good question, with the answer being equally succinct, as well as unequivocal. Indeed, planners across the country often create multiple trusts for varied reasons.
A tandem question that a specific individual might reasonably ask is this: Given my particular circumstances, will creating more than one trust promote my estate goals? In other words, ‘Should I create more than one trust?’
The answer to this question depends on your specific needs and desires. For example, maybe you want to create separate trusts for separate assets. Or, maybe you want to create different trusts for different beneficiaries. Some folks consider this when they have been in more than one marriage or relationship. They fear leaving their beneficiaries fighting so they establish different trusts to really separate those assets.
A seasoned estate administration lawyer will help a would-be or actual client identify exactly what it is that is sought to be addressed through trust creation. Is it asset preservation and/or protection from creditors? Is the primary focus on charitable giving? Perhaps a loved one has special needs, which a trust can optimally address. It is sometimes the case, too, that a planner is thinking far down the road and might see the value in establishing a generation-skipping trust.
The bottom line is that there are myriad trust vehicles that can be smartly incorporated into a tailored estate plan. A proven attorney can discuss them with a planner and ensure their employment in a manner that optimally promotes estate-linked objectives.