Trusts: Planning Tool That Can Make Sense


Trusts are an important estate planning tool. They don’t require large sums of wealth before they can make good sense and they don’t have to be overly complicated or expensive to setup.

A trust is an agreement between a maker and a trustee to manage certain assets. A trust can be created as part of a last will and testament, but usually is created by a separate document. Trusts can be revocable or irrevocable. Which type makes sense depends on your personal objectives and should be determined with the guidance of a trusted professional.

“Like modes of transportation, the decision on the appropriate estate planning vehicle depends on your situation, priorities and issues of concern,” says Steve Anderson, attorney with Post Anderson Lindstrom, LLP.

Here are some of the possible advantages to using trusts:

  • Trust assets can directly pass to beneficiaries without going through the probate process.
  • Trusts can be structured to save on federal estate taxes.
  • Trusts can simplify asset management in case of a disability of the owner of assets.
  • Trusts can be structured to meet the needs of beneficiaries who may be too young, have bad spending tendencies or could be taken advantage of by others.

A good first step in considering whether a trust is best for your situation is to consider the assets you own, how you would want those assets managed in case of disability or death and the intended beneficiaries at your death. Effective planning means not leaving those decisions to someone else.

Folks working with Buttonwood and our network of trusted professionals typically find the time and modest expense to incorporate trusts in their planning are a small price for the lasting sense of organization, simplification and peace-of-mind about the future management and distribution of their hard-earned assets.

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