Trusts are used for a variety of purposes. For some wealthy individuals, a trust can be used to minimize the impact of the federal estate tax. For more than 99% of us, the federal estate tax isn’t a problem; estates that are less than $5,450,000 (for estates of persons dying in 2016) will not have to pay the tax.
Even smaller estates may wish to use trusts for a variety of purposes.
Protecting Minor Children
Children under the age of 18 cannot handle their own money. Establishing a trust allows you to decide who will manage the money for them. The trust can end at age 18, or could continue until the child is older; not all 18 year olds are responsible enough to handle a large sum of money!
Special Needs Trusts
If you wish to leave money or property to a person who is disabled, you may be concerned that this money might disqualify them from receiving public benefits or services to which they are otherwise entitled. An attorney can assist you in drafting a trust which will allow the person to remain eligible for these services, permitting the money to be used to supplement their income when needed.