People have long associated trusts with the super-wealthy. There is a common misconception among people that trusts only help those with hundreds of thousands or millions of dollars in assets. The average family creating an estate plan or last will not have that amount of money to worry about. Maybe there is only $20,000 in savings and some equity in the family house.
Regardless of how much you have to pass on, creating a trust can help ensure that less of it winds up paying for the costs associated with probate court or diverted to someone you didn’t want to receive it. When you think about it from that perspective, creating a trust when you have fewer overall assets is actually a very smart decision.
Trusts cost the same to set up regardless of how you fund them
There are many different kinds of trust, and each one has its own benefits and uses. Different families may benefit from different kinds of trusts. Once you determine which kind of trust you want to create, you simply need to take legal steps to create and fund the trust.
The process of creating a trust is relatively similar, regardless of the amount of assets you use to fund the trust. In other words, a person with an estate worth less than $50,000 will pay the same amount to create a trust as someone who intends to fund it with a million dollars.
While trusts tend to be slightly more costly than a standard estate plan or last will, they offer the testator, or person creating the will, more control over the eventual use of their assets, more protection from probate court and improve peace of mind regarding their legacy. If you believe that there is someone in your family who might contest your last will or if you worry about someone wasting their inheritance, a trust could be the ideal way to plan for your family’s future after you die.
You don’t even need liquid assets to create a trust
Another common misconception that people have about trusts is the idea that they must have a large amount of liquid capital available to fund the trust. However, many people have trusts they don’t actually fund until they die. Other times, people move their family home into a trust. You could even choose to allocate to the trust in the event of your death.
Regardless of how much you have to leave to your heirs or whether or not you have liquid capital to fund your trust, creating a trust in Massachusetts is an option for your family. It might be worth reading into the tax and legal protections offered by trusts to see if creating one will be in your best interests.