Providing Peace Of Mind
For You And Your Family

3 times when a will may not be the best way to pass on an inheritance

On Behalf of | May 21, 2024 | Wills And Trusts |

Wills are testamentary instruments that serve multiple purposes. People primarily use them to specify who should inherit from their estates and to nominate a guardian for minor children or adult dependents with special needs. Wills can be very effective estate planning tools, but they are not always the best solution.

Adults in certain circumstances may eventually realize that a trust might be a better solution than a will. Trusts can help to ensure that certain people inherit from an estate and can give the testator more long-term control over the use of estate resources. The following are some of the scenarios in which a trust is likely a better option than a will for planning a legacy.

When beneficiaries are young

A parent who wants to leave most or all of their assets for their children may need to take a few extra steps. If their children are not yet legally adults, they do not take control over their inheritance immediately. Instead, their surviving parent or new guardian manages their inheritance until they become legal adults. Many parents would prefer to protect those resources until their children have direct access. A trust is a way to ensure that some assets remain for the child when they turn 18 and can actually control their own inheritance.

When a family member has special needs

Perhaps someone has an adult child who is autistic. Maybe they have a family member with an acquired brain injury that leaves them dependent on others for daily support. Those with special needs may lack the capacity to properly manage a large inheritance. Additionally, they could be at risk of losing crucial benefits that they rely on to ensure their independence or maintain their standard of living. A special needs trust can be a way to augment someone’s quality of life without depriving them of state benefits or putting them at risk of financial abuse.

When assets could be vulnerable during probate

Perhaps someone has a multi-million-dollar estate that could be subject to taxation after they die. They may want to minimize their risk of taxes. On the other hand, they might have a typical middle-class lifestyle. They may have to worry about creditor collection efforts or Medicaid estate recovery efforts consuming the assets in their estate before their loved ones inherit anything. Trusts can be useful for minimizing tax liability or for protecting assets from creditors.

There are a host of scenarios in which a trust might be preferable to a simple will when planning an estate. Reviewing long-term goals and current concerns with a skilled legal team can help someone choose the right estate planning tools for their personal needs.