Frequently Asked Questions About Trusts
Trust law is complex, and the breadth of options available can be overwhelming. If you are searching for more information about trusts, you can contact Scott + Hespen Law, PLLC online or call 651-968-1457. We will give you the time and attention you need to understand your options.
How important is a trust?
Depending on your personal wishes and financial profile, a trust could offer significant advantages, including:
- Asset protection against creditors
- Personalized control over inheritance
- The ability to keep certain assets out of probate
- Protection against high estate taxes
For some Minnesota families, a trust can be far more cost-effective than probate — even if you already have a will. The initial costs of setting up a trust could end up saving your family a greater value because of the tax benefits and other protections. An experienced lawyer can clarify your potential savings at a consultation.
Do I need a trust if I already have a will?
Wills and trusts achieve different goals. Although a will can be the foundation for a strong estate plan, it may not provide the protection and control you need. One of the main benefits of creating a trust is the ability to have extra protection and control over the assets that you assign to the trust.
Normally, all assets in a decedent’s estate are subject to probate. However, if you place money and property in a trust, those assets no longer belong to your estate. Instead of a probate court, the rules of the trust will determine what happens to the assets.
For many families and business owners, using trusts can therefore give them more flexibility and peace of mind that their wishes will be respected.
What type of trust should I create?
There are many types of trusts, but each type falls under one of two main categories:
- Revocable: Also known as a living trust, a revocable trust is changeable during your lifetime. You can add or remove assets from the trust, and you can choose to end the trust entirely.
- Irrevocable: An irrevocable trust cannot be changed once you establish it. For this reason, it is important to consult a lawyer before placing assets in an irrevocable trust.
Within these categories, there are trusts that serve specific purposes. For example, a special needs trust can help parents provide for a child with a disability or other special needs.
Because there are many different consequences and benefits to each type of trust, having accurate information and professional insight is key. Your estate planning attorney can assess your unique circumstances to determine which type of trust could best serve your needs.