An individual should ask several questions when determining whether or not to have a trust. As they can cost thousands of dollars to create and execute, it may be less expensive to go through a simplified probate process if possible. However, trusts may be less expensive depending on the value of an individual’s estate.
This is because some states such as California charge probate fees of up to 4 percent for the first $100,000 of an estate’s assets. If the cost of probate is higher than the cost of a trust, it may be better to establish a trust. Another advantage of a trust is the ability to shield assets from the probate process, which is made available to the public. It may also be more cost effective to establish a trust for those who own property in other states.
Those who own property in other states may need to go through probate in those states as well. This could increase the cost of settling an estate. Parents who have children with special needs may also favor a trust as the child will not have to handle the trust on his or her own. It may also keep that child eligible for most forms of government assistance.
Trust planning may come in handy for those who are trying to determine if it is right for them. By weighing the benefits of a trust compared to the benefits of a will or a simplified probate process, an individual can make the best decision for him or her. An estate-planning attorney may be able to assist an individual with the creation or execution of trusts or other estate planning documents. This may make it easier to protect assets both now and in the future.
Source: Forbes, “Should You Have A Trust?“, Erik Carter , September 12, 2014