Historically, the perception was that trusts were exclusively a tool for preservation of assets of the super wealthy. Today, trusts are useful estate planning tools that benefit all kinds of people - even those who don’t have a private jet at their disposal.
For example, should both parents die prematurely, trusts give parents with small children more peace of mind than merely naming a guardian in their will. A trust can be written to account for different ages, financial situations and special circumstances when distributions are made to benefit the couple’s children. Trusts can allow deceased parents to care for their minor children as they would have done had they been living.In addition, trusts avoid the need for a probate court appointed financial guardian for an underage child.
A trust that can be changed during lifetime becomes irrevocable at death. Thus, in the case of a second marriage, there can be comfort in knowing that children from a prior marriage will be protected from frivolous distributions on behalf of a new spouse. With proper estate planning, you can protect an inheritance for your children even when a second marriage is involved. Alternatively, a trust can be a simple way to care for those who may not be able to own or manage property outright. Those with special needs or with such issues as being a spendthrift or creditor problems, would not benefit from an outright distribution of assets. A trust is an easy way to pass down the use, enjoyment or benefit of property that can’t be easily divided, like a house or business.
Also, trusts have several procedural advantages for some clients. Unlike a will, trusts are private agreements that do not become part of the public record. Likewise, assets in a trust are not public record versus those that go through the probate process in a will.
Trusts can be used to help minimize Ohio estate taxes for some people through 2012. Even with the elimination of the Ohio estate tax expected for those who pass away in 2013 and beyond, a trust structure, as mentioned above, has not been and should not be considered exclusively as a potential method for reduction of estate taxes. Finally, it is more difficult in Ohio for beneficiaries - or prospective beneficiaries - to contest the validity of a trust than to contest the validity of a will.
Trusts aren’t for everyone, nor are they just for those with substantial wealth. Whatever your circumstances, feel free to call Loma Swett or your Stark & Knoll attorney, at 330-376-3300, or e-mail info@stark-knoll.com to find out whether this adaptable, flexible estate planning tool might be the right choice for you.