Why is there so much confusion around trusts? In my opinion, it is because they are often used the wrong way and not used for the right reasons. We had some clients whose attorney tried to get them to do a trust they did not need. Fortunately for them, our client had a reliable guide to step in and tell them they did not need to spend the money to get a trust. So how do you know if you need a trust? Let’s dive in.
There are two types of trusts:
Revocable trust
This is the simpler of the two types of trusts. There are some great uses for it, but we see this type of trust misused often because most people do not need it (especially our clients who are in or near retirement). Most of the time, if they do not have a complex situation, basic estate planning documents will suffice, and in turn be more affordable than establishing a trust.
This type of trust could be good in certain circumstances, such as when you don’t trust your kids. Some may laugh at this, but there are certainly times when this can be the case. With this trust, you can limit how much your children are able to spend each year. We had a client who allowed her kids to take out only $20,000 per year from her estate....
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