Your will may be the most fundamental and important component of your Minnesota estate plan. Yet, sometimes, you may have unique estate planning goals that you might need to use other estate planning tools or techniques to accomplish. Trusts are a type of estate planning component you may want to use in certain cases, and there are many things a trust might be able to do for you that a standard will cannot.
According to Kiplinger, you may want to consider creating a trust if you want to do any of the following.
Protect public benefits eligibility
If you have a loved one with a disability or a beneficiary who relies on public assistance for another reason, leaving assets to this individual in a will may make him or her ineligible for government benefits during means-testing. When you move assets into a trust, they do not come into play when determining public benefits eligibility.
Avoid probate and maintain privacy
A will has to go through probate before your beneficiaries gain access to what you leave them. Assets you enter into trusts skip the probate process, which may help your loved ones gain access to them sooner. Probate is also public, so placing assets into trusts helps you maintain a higher level of privacy.
Prevent reckless spending
Many people also use trusts to set conditions with regard to when beneficiaries may access what is inside. For example, if you have a child who is fiscally irresponsible, you may want to give your trustee instructions to distribute that child’s assets only when he or she demonstrates proof of responsibility.
There are many other estate planning goals you may also be able to accomplish through a trust, but these are some of the most common reasons behind their creation.
