I often hear young parents say that they are not old enough, established enough or wealthy enough to need an estate plan. They especially don't think they need anything as formal as a trust. It's true, a trust may not be right for every person.
But I do strongly believe that a revocable living trust is essential for young families . . . ESPECIALLY for families with minor children.
Estate plans are about much more than preserving wealth and spoiling your children. In fact, they are about planning and protection. If you have minor children, your estate plan can express your wishes for who cares for the children, how they will be supported, and when they will inherit their parents' assets (no matter the size).
Without a trust, all of these decisions will be made through the probate court. Not only is the probate process time-consuming, expensive, and part of the public record, but it also is subject to challenges. Family members and others who do not agree with decisions outlined in your will have the opportunity to challenge and make their case to a probate judge.
Top 3 Reasons Young Families Need A Revocable Living Trust
1. Keep assets out of probate.
Without a trust in place, all assets will pass through the state probate process. This process can take up to a year to complete, and the expenses (between court costs and attorney's fees alone), can really add up. Probate is also public. This means all decisions you make will appear on the public record. A trust transfers assets immediately and privately, without the need for a court procedure.
2. Avoid a windfall.
Since a minor child cannot inherit assets, any assets designated for a minor child in a will are held until the child reaches the age of 21. At that time, the entire lump sum of the child's inheritance will be transferred to their ownership. To avoid a windfall, a revocable living trust can be fully customized based on your wishes. You can designate certain age or life event milestones that trigger distributions, or you can set a distribute date or schedule that makes sense for your family.
3. Effective in the event of incapacity.
Unlike a will, a trust goes into effect immediately. The grantor will usually name him or herself as the primary trustee so that no control of the assets is transferred. The successor trustee, however, can step in and begin administering the trust in accordance with the grantor's instructions as soon as the grantor is unable to do so. This can include incapacity as a result of injury or illness.
Again and again I have worked with clients who wished that their loved ones had chosen to use a trust to provide for their heirs and descendants.
I’d love to help you find out if a trust is right for your young family. Send me a message or schedule a free consultation to discuss your options. Receive more information on revocable living trusts here!
I can't wait to hear from you!