A trust is, in some ways, a will alternative. If done properly, you theoretically would not need a will if you have signed a trust, although we typically sign a will and a trust together, with the will being the “back up”. Like a Will, a trust allows you to leave your assets to your beneficiaries. Unlike a Will, you do not need to leave your heirs their inheritance in a lump sum and you can easily set up terms to distribute it slowly over a number of years, or a lifetime.

A Will does not become effective until death, so it cannot cover a future disability. A trust, on the other hand, becomes effective upon signing so that many people will put in instructions on how they wish to be cared for in the event of a future disability.

A trust is created through a legal agreement between two parties – the owner of the assets (the Grantor) and the person charged with managing those assets (the Trustee), for the benefit of a 3rd party (the beneficiary). During lifetime, the client typically holds all 3 roles and controls the assets for his own benefit.

After death, a successor Trustee takes over for the client and holds the assets for the successor beneficiaries. A trust is generally very detailed and provides the Trustee with instructions on what to do upon the Client’s death or disability so, if drafted properly and funded at death, there is typically no reason to go through the probate process.

There are certain types of general situations when a trust is often preferable to a will:

• For those with minor children
• For those who have lost their spouse
• For those with beneficiaries who have special needs and are, or could be, on state assistance
• For those who believe they may become mentally incompetent in the future and will need help managing finances
• For those who wish to avoid probate
• For those who want do not want their children to receive a large sum of money outright
• For those who want to protect a spouse’s inheritance from possible nursing home costs
• For those who wish to take income from their assets during life, and leave the assets to a charity on death