Many people have an estate plan that includes their will and perhaps information about a pre-purchased burial plot. Other people may include advance directives explaining their medical preferences or powers of attorney that give someone else financial authority if they become incapacitated.
Trusts are another document that can play an important role in estate planning, but many people overlook trusts because they think they are too complicated or expensive. There are many reasons for average people to consider adding a trust to their estate plan, such as the two concerns below.
You have family members who always fight over everything
Maybe the beneficiaries of your estate include two of your children who have found ways to argue about everything they have ever done together. It’s also possible that you might just have one family member with a reputation for being difficult who you think could challenge your wishes because they want a bigger inheritance.
Moving your major assets into a trust can make it much more difficult for someone to successfully challenge your estate plan in court.
You worry about expenses toward the end of your life
Do you think you might eventually need Medicaid to pay for a nursing home? Do you think you could wind up dying with a significant amount of debt?
When you consider that nursing home support and end-of-life care can cost thousands of dollars a month, you may worry that you won’t be able to get Medicaid benefits when you need them or that your debt will completely eliminate your legacy.
Adding a trust to your estate plan could be a way to protect some of your property from creditors or Medicaid recovery programs. As a bonus, having major assets in a trust can make it easier to qualify for Medicaid.
Thinking about your unique needs as you age can help you decide what documents you need to include in your estate plan.