We, as advisors here at Summit, get a lot of questions from our clients about the value of setting up a living trust. I would like to explain the differences between a trust and a traditional estate plan and give you an idea as to when it is relevant and when it makes sense for you to set up a trust.
Most people, when they are first starting out, can set up a basic will, power of attorney, and medical directive. A will directs where your assets should go after you’re gone. The nice thing about a will is - it’s pretty simple, it's cheap, and it’s pretty easy to change. The downside, however, is that if you have assets that pass with your will, they will have to go through a system called probate, which is a court process that can take six months, it can be expensive, and it’s public. So, if you have any desire to keep your assets private so that other people don’t know about it, it’s good to establish a trust, as that will help you make sure that it stays private - that’s one of the benefits of using a trust. The other nice thing about a trust is that you can go and create a trust that lives beyond you and controls the assets and the disbursement of those assets as well. The downside to using a trust is that it can be a little bit more expensive to set up. Typically, you’re going to want to work with an attorney to do it, but you can be a little bit more complicated with the way you want to direct things.
So, as a general rule, when we’re thinking about complexity… if you own a home, if you have assets that are outside of retirement accounts and things that you want to direct - basically directing traffic after you’re gone, a trust is a really good way to do that.
If you’d like to get connected with an attorney, any of our advisors here at Summit can certainly help you get connected. Or if you have any questions about whether or not a trust is right for you, I’m certain that any one of the advisors here at Summit can help you figure that out.