Estate planning can be as complex or simple as your financial and family needs. For those with just one possible heir and only a few large assets, a will might be all they really need. For those with multiple beneficiaries, complex assets or difficult family circumstances, a trust might be a better solution than a simple will.
Trusts are often useful to people in certain situations, like those who need Medicaid or those who want to avoid estate taxes. Estate trusts can also be very beneficial for people with certain kinds of family members who might complicate their legacies.
The black sheep or contrarian in the family
In some families, everyone gets along. However, many families have that one member who seems to enjoy standing in opposition to everyone else. They complain about the meals served on holidays or the unique family tradition that everyone else enjoys. They pick fights with their siblings or parents and generally make everyone’s life a little bit more difficult.
The contrarian in your family could potentially choose to challenge your estate plan if you don’t structure it carefully. A trust can be harder to challenge than a will, making it a good tool for those with a particularly contentious family member.
A person with a substance abuse or gambling problem
Addiction comes in many forms. Most families affected by addiction will have a loved one who misuses pain medication or sneak alcohol into a family gathering. However, there are other forms of addiction that can be just as dangerous and expensive, including gambling addictions.
When you have a loved one who struggles with addictive tendencies, a trust can be a way for you to include them in your estate plan without helping reinforce their addictive behavior.
A loved one in an abusive or unhealthy marriage
If you have a child married to someone who is abusive or toxic, you may desperately want to see them break free of that relationship. Unfortunately, until they leave, their spouse could potentially lay claim to the inheritance you leave them.
Especially if they divorce after you die, the in-law you don’t particularly like could try to lay claim to your child’s inheritance. Creating a trust will prevent your in-laws from claiming an inheritance as their own and will make it much harder for your child to accidentally commingle their inheritance and put it at risk.
Identifying warning signs that a basic last will won’t suffice for your needs can help you create a trust to uphold your last wishes.