Estate planning is often associated with the basics: a will, power of attorney, and perhaps a healthcare directive. While those are essential, they may not be sufficient for clients with more complex needs. For those seeking greater control, privacy, and flexibility in managing how their assets are passed on, a trust can be a strategic addition to their estate plan.

What Is a Trust?

A trust is a legal arrangement where a trustee manages assets on behalf of beneficiaries. It can be revocable (modifiable during your lifetime) or irrevocable (generally permanent). Trusts help avoid probate, protect privacy, and support more complex planning needs.

When Might You Need a Trust?

Trusts are not limited to high-net-worth individuals. They can be valuable in a variety of situations, including:

· Reducing or avoiding the probate process

· Preserving privacy around the transfer of assets

· Providing long-term support for minors or individuals with special needs

· Ensuring equitable treatment of children in blended families

· Managing charitable giving over time

· Facilitating business succession

· Protecting assets from potential creditors, where permitted by law

Trusts can also serve as a safeguard in the event of incapacity, enabling a successor trustee to manage financial affairs without requiring court intervention.

Why Beneficiary Designations Matter

Assets like retirement accounts and life insurance typically transfer via beneficiary designations, not through your will or trust. These designations override your estate documents, so regular reviews are essential to ensure alignment with your overall plan.

Pros and Cons of Incorporating a Trust

Advantages

· Bypasses the probate process, which can save time and legal expenses Requires upfront legal fees and administrative maintenance

· Maintains privacy regarding asset distribution

· Allows for structured, conditional distribution of assets

· Supports continuity in the event of incapacity

· May offer asset protection or estate tax benefits (based on structure)

Considerations

· Requires upfront legal fees and administrative maintenanc

· Needs careful funding to ensure assets are properly titled

· Irrevocable trusts limit the grantor’s control over assets

· May be unnecessary for smaller or less complex estates

· Not all trusts offer tax or creditor protection

Strategic Planning Insight

A trust should be evaluated as part of a comprehensive financial and estate plan. It is not a one-size-fits-all solution. The decision to implement a trust depends on a client’s objectives, family structure, types of assets, and long-term planning goals.

A well-designed trust can ensure your legacy is preserved, your beneficiaries are protected, and your wishes are carried out efficiently. Collaborating with a qualified financial advisor and estate planning attorney is critical to ensure the trust is properly structured and integrated into your overall estate strategy.

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Sources:

Tammy LaGorce, What Your Estate Plan May Be Missing, The New York Times, May 6, 2025. Available via RealClearMarkets: realclearmarkets.com

Internal Revenue Service. “Types of Trusts.” irs.gov

Financial Industry Regulatory Authority (FINRA). “Estate Planning Basics.” finra.org