Trying to keep things simple works in some situations, but not universally. For example, focusing on simplicity might leave you under-protected when it comes to creating at your estate plan.
Adding more documents can mean better protecting yourself and the people that you love. For example, integrating a trust into your estate plan can be a very beneficial move in certain circumstances, including the three below.
When you want to leave something for your grandchildren (but not your children)
Your children have likely benefited from your generosity and success throughout their adult lives. They may no longer require any support. A trust makes it easy for your inheritance to skip a generation and provide valuable support for your grandchildren, like assistance paying for college.
When you have loved ones who would struggle with an inheritance
You have assets you want to leave for others but cannot trust in their ability to manage those resources, creating a trust can protect you both. You can fund a trust to prevent a loved one with a serious addiction from using their inheritance for drugs or gambling. You could also fund a special needs trust for a loved one who can’t manage their own assets.
When you worry about taxes or creditors
Both those with large estates and those without much to their names can benefit from creating a trust. Wealthy people could use a trust to reduce the taxable value of their estates and the potential of estate taxes diminishing what they leave behind. Those with fewer assets could use a trust to protect their property from creditors or Medicaid recovery programs.
Thinking about the potential risks involved with your estate plan can help you decide the best structure to use.