One of the more common misconceptions about trusts is that they are only for celebrities and the wealthiest of families. Not so. Trusts can accomplish a wide range of planning objectives, many of which apply to “regular folks.” Let’s look at few examples.
Probate is a legal process whereby an individual’s debts are paid and the remaining assets are distributed to beneficiaries after the individual in question passes away. Probate is a public process, meaning anyone can get information about the decedent’s assets, debts, creditors, and more. A trust, by allowing your estate to avoid probate, can protect your privacy.
In addition, the probate process can be time-consuming, stressful, and take several months to complete. (In Washington D.C., probate generally takes 12 to 18 months.) As the estate slowly winds its way through probate, beneficiaries cannot receive their inheritances. This delay could be devastating if your spouse does not have money available for mortgage and car payments, insurance, and other financial responsibilities. Assets held in a trust, on the other hand, can generally be distributed much sooner.
Irrevocable trusts can protect your assets while you are alive from threats like creditors, lawsuits, the cost of long-term, and more.
If you are worried that your children may not be ready to manage an inheritance on their own, you can structure your trust in such a way that your heirs must accomplish certain goals or reach a certain age in order to receive their inheritances. For example, you could stipulate that your son or daughter must graduate from college before receiving a portion of his or her inheritance.
As we mentioned earlier, trusts can accomplish a wide range of objectives. For instance, if you have a loved one with disabilities, a special needs trust allows you to set aside funds to maximize your loved one’s quality of life without jeopardizing eligibility for essential government programs like Medicaid and Social Security Income (SSI).
These are just a few examples of what trusts can help you accomplish. To learn whether a trust is right for you and your family, call the Law Offices of Clifford M. Cohen at (202) 895-2799 to schedule a meeting. We can meet in-person at our office or virtually via Zoom and other platforms.