Why Do You Need A Trust?

Yee Law Group Inc. > Why Do You Need A Trust?

Clients often ask what determines whether they will need a basic will or a trust. These are some of the suggestions I give as a estate planning lawyer Phoenix AZ relies on:

Will You End Up In Probate?

My first question is always, “Are you comfortable with your estate going through probate?” Every estate and client is different, the type of assets are different and the parties involved are different.

For some people the idea of dealing with the court, making court filings and following specific timeframes seems daunting. Some states can have easier processes or more informal probate proceedings, but it can still seem like a tough task. In some cases, a probate may even make sense, there may be a comfort in knowing that the court is involved to make sure things are completed.

Are there people you wish to protect or have assets managed on their behalf?

For clients with minor children, special needs individuals, dependency issues or other challenges, it may be critical to not leave them with direct control of assets. Clients needs to know that without putting a trust together and identifying trustees of their choosing, they will be leaving it up to the court to decide who will be appointed conservator over assets.

Just as one consideration, not using a trust could in an ex-spouse being appointed by the court to be in charge of assets for a child.

What Are Your Assets Like?

Do you have assets in multiple states? Do you have a business? The complexity of the assets can have bearing on whether a trust makes sense. If there are assets in multiple states, a will plan would require probate in multiple states. If there are business assets, there may be a need to maintain seamless continuity to prevent damage to the business. In other cases, a family may wish for assets to remain in a family. For that, a trust would make sense to allow for a long term plan of operation.

What Time Period Are You Planning For?

A will only has a use after someone passes away. Even if they were on their deathbed it would have no function or ability to give authority over assets. If it is important to a client that management be consideration not just for death, but also in the event of incapacity, then a trust would be right vehicle to give authority and responsibility over assets.

Thanks to our friends and contributors from Kamper Estrada LLP for their insight into the trusts and estate planning practice.