When people talk about a "trust" they are most likely talking about the most basic kind, a the revocable living trust. The revocable living trust is the most common type of trust and the one that is included in the typical estate plan.
The following are the five most common scenarios when you may benefit from using a trust:
1. INCAPACITY PLANNING
2. MIXED FAMILIES
3. CREDITOR/SPENDTHIRFT PROTECTION
4. YOUNG BENEFICIARIES
5. PROBATE AVOIDANCE
The other typical estate planning documents include a will, power of attorney, and advance health-care directive. The most simple estate plan does not include a trust. To include a trust as part of an estate plan is generally more complex, which takes time and expertise to prepare effectively.
A common misunderstanding is that the “best” estate plan always includes a “trust.” I am a firm believer that the best estate plan is what the informed client decides. The responsibility of an estate planning attorney is to educate each client regarding the tools and strategies available to best accomplish each client’s goals. A trust may or may not be necessary to do just that. A simple will is sufficient for many people.
No Reservations Needed
John Roth is the founder of Hawaii Trust & Estate Counsel, a statewide estate planning law firm with offices in Waimea, Hilo, Kona, and Honolulu. He has taught Estate Planning at the Richardson School of Law, and business law courses at the University of Hawaii—Hilo. He has resided in North Hawaii since 2008.