A commonly asked question at Vick Law is whether a trust is better than a will. As with many questions asked of attorneys, the answer is: “It depends”. A trust can be better than a Last Will and Testament depending upon various factors, including the client’s interest in control, purpose and efficiency.
CONTROL: Sometimes clients want to make sure that their beneficiaries will use the inheritance in a proper manner. Perhaps the client wants a beneficiary to use the inheritance specifically to start a business or to fund a college education. A trust ensures that the beneficiaries will use the inheritance as the client, rather than beneficiaries, desires. You might call this “ruling from the grave”. Unfortunately, in this age of the opiate crisis, a client might find wisdom in maintaining control through a trust.
PURPOSE: A client's purposes in protecting financial resources can be a factor in whether a trust is better for the client. In Indiana, Medicaid for the Aged and Disabled requires certain levels of income and resources prior to granting eligibility. A trust, whether at the time of a long term care event or in preparation for it, may assist clients in becoming Medicaid eligible. If protecting assets from long term care expenses is important to the client, a trust might be the right estate planning option.
EFFICIENT: A trust might be better for a particular client so that the estate is settled in an optimally efficient manner. Suppose an individual has real estate in Indiana and another state. With only a Last Will and Testament, his/her estate will likely have to go through two (2) probate administrations, here in Indiana and in the other state. That might result in a very costly and time-consuming process. Contrariwise, a trust will likely prevent any probate administration. Instead, the real estate and other property will pass directly from the trustee to the beneficiaries in accordance with the terms of the trust agreement.
There are many, many more factors that go into whether a trust is the best option for a client. Take advantage of the free consultation at Vick Law to find out whether a trust fits your estate planning needs.