When people hear the word “trust,” they often think it’s something only for the wealthy. In reality, trusts are useful estate planning tools for people from all walks of life—especially those who want more control over how their assets are managed or distributed.
Whether you’re planning for your family, protecting your business, or simply looking to keep things private, a trust may be worth considering. Here’s a closer look at how they work and whether one might be right for your situation.
What Is a Trust, and How Does It Work?
A trust is a legal arrangement where one person (the trustee) manages assets for the benefit of another (the beneficiary). The person who creates the trust (called the grantor) sets the rules about how and when the assets are distributed.
There are two main types of trusts:
- Revocable Trust: Also known as a living trust, this can be changed or revoked during your lifetime. It helps avoid probate and gives you flexibility while you’re alive.
- Irrevocable Trust: Once established, this type usually can’t be changed without the beneficiary’s consent. It offers stronger asset protection and can be useful for tax planning or protecting against long-term care costs.
Who Should Consider a Trust?
While not everyone needs a trust, they can be especially helpful for people who:
- Want to avoid probate: Assets placed in a trust generally don’t go through probate, which can save time and reduce legal fees for your heirs.
- Have young children: A trust can manage money or property for minors until they reach a certain age.
- Own property in multiple states: A trust can help bypass multiple probate processes.
- Have a family business: Trusts can ensure a smooth transition and protect business interests.
- Are concerned about privacy: Unlike wills, trusts are not part of the public record.
- Want to set conditions for inheritance: You can include specific instructions, such as requiring a beneficiary to graduate college before receiving funds.
Common Misconceptions About Trusts
- “Trusts are only for the rich.” False. Many middle-class families use trusts to streamline their estate plans and protect loved ones.
- “I’ll lose control of my money.” With a revocable trust, you remain in full control while you’re alive.
- “It’s too complicated.” A trust does involve some upfront planning, but with legal guidance, the process is manageable—and often well worth the effort.
A trust can be a powerful way to protect your assets and provide peace of mind for your family. If you’re wondering whether a trust fits into your estate plan, Persinger & Persinger can walk you through your options and help create a plan tailored to your goals.
Note: This post is for informational purposes only and does not constitute legal advice. To find out whether a trust is right for your situation, contact Persinger & Persinger to speak with our estate planning team.
