(440) 546-5290 christina@hronek-law.com

As an estate planning attorney, I find that there are many misconceptions about trusts.  The biggest misconception is that trusts are only for the wealthy.  This unfortunately is just not true and almost every single trust I have prepared are for reasons having nothing to do with the amount of wealth a client has.

Granted, if you are someone who is generally considered to be wealthy, by all means a trust is a great planning tool to reduce or eliminate estate taxes upon death.  However, with the new tax code passed by Congress at the end of 2017, an individual’s estate would need to exceed $11.2 million in assets before an estate tax is levied.  As you can imagine, very few people fall into this category.

The primary advantage of a trust is the ability to control how your assets are managed and spent beyond your death.  I always recommend that parents of young children (i.e. under the age of 25) execute a trust agreement.  Without one, the child receives his or her inheritance at age 18 to do whatever he or she pleases with the funds.  Also, individuals who want to pass their estate to a person receiving government benefits or have creditor problems should have a trust or the inheritance will throw them off their benefits or go directly to the creditor.  Basically, it will disappear quickly.

The secondary advantage to a trust is the avoidance of Probate administration upon a person’s death.  When a trust is properly drafted and implemented, assets can pass to the trust beneficiaries quickly and efficiently, without anyone having to step foot in Probate Court.  Also, a trust is beneficial if the person you want to handle and wrap up your affairs does not live in Ohio.  This is especially helpful if you own real estate.

So, when you are thinking about creating or updating your estate plan, do not automatically assume that a trust is not for you.  Instead, seek out a qualified estate planning attorney and have a conversation.  The right estate planning attorney will review all your options and inform you of the associated pros and cons.  Further, that attorney should give you the options that make the most sense, and are the most beneficial, given your particular circumstance.

Please be advised that Christina M. Hronek is licensed to practice in the State of Ohio only and the information provided in this article is based upon Ohio law.  This article is for informational purposes only and does not constitute legal advice.

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