Trusts have long been considered the domain of the wealthy. After all, most everyone has heard the term “trust fund baby” used to describe a child from an affluent background. While trust planning remains popular with the affluent, more and more ordinary people are recognizing the benefits of the use of revocable trust planning to achieve their estate planning goals.
So, why is this happening? Simply put, revocable trusts have advantages that cannot be replicated through the use of wills alone. Because property and assets held in trust are non-probate assets, assets that would otherwise be subject to the probate process are not subject to probate when held in trust. Because assets held in trust are not subject to the probate process, trust assets remain private and are not ordinarily subject to public disclosure.
Trusts offer other advantages. Trusts can be used very effectively to control asset distributions. Trusts can help ordinary people set up distribution plans for their children or other intended beneficiaries that distribute assets over extended periods of time, for specific purposes and with specific assets. While children are ordinarily entitled to receive assets passing by will at age 18, that period can be prolonged through the use of a revocable trust. Parents can manage the distribution of their assets to their children through the use of a trustee to control distributions over time, in amount and for the particular purposes set out in the trust. This planning is frequently employed to avoid giving unfettered access to assets to children at age 18, when many, if not most, are ill-prepared to manage and maintain significant assets.
In addition to the benefits for your family, trusts are very effective tools to manage your assets in the event of your disability or incapacity. In the event that you become incapacitated or disabled, a trustee or trustees named in your trust will manage the assets in your trust for your benefit. This can be achieved without court-ordered conservators or guardians that might otherwise be necessary and whose appointment requires filings and hearings before the probate court.
Revocable trusts are flexible. Trusts can be amended, or even revoked, relatively easily. Trusts can and should be amended to reflect the changing circumstances of one’s family over time and to capture other advantages occasioned by changing laws. Once in place, amending a revocable trust is ordinarily straightforward and inexpensive.
While trust planning tends to be somewhat more expensive in terms of upfront costs, it can be significantly more efficient, in time and money, than probating an estate. This is especially true in states like New Hampshire, where the probate process is complicated and burdensome. For estates containing significant assets, probate administration is likely to be time-consuming, expensive, and extended in duration. As a result, you’re well-advised to consider trust planning as part of your overall estate plan.
While everyone should maintain a comprehensive estate plan, including wills, powers of attorney, advanced health care directives and the like, more people are considering revocable trusts to achieve their estate planning goals. Like each element of a comprehensive estate plan, whether or not a trust is right for you and your family should be considered in light of your circumstances and planning goals. Consult with your estate planning attorney to consider your circumstances and estate planning objectives.