Not everyone shares the same estate planning goals, and you may face unique challenges or circumstances as you work on your Montana estate plan. While a will is an important and necessary part of any Montana estate plan, there are limits to what a will does. However, you may be able to take care of other estate planning goals a will does not allow for by creating one or more trusts.
According to Kiplinger, a trust is a type of fiduciary arrangement that involves someone else managing assets you intend to leave behind for one or more beneficiaries. You have to appoint someone trustee over the trust, and that party then oversees distributions from it and otherwise makes sure your wishes come to be. What are some of the most common reasons for creating trusts?
To protect public assistance eligibility
Many people who make trusts do so because they want to leave assets to a beneficiary who receives some type of government assistance, such as Supplemental Security Income or Medicaid. If you wish to do this, leaving assets to this individual in your will may make him or her ineligible for public benefits that require means-testing.
To avoid probate
Assets you place inside a trust do not go through the probate process. Probate is the proceeding that otherwise takes place upon your death to “prove” your will. Probate may prove long and expensive, and it often leads to delays in terms of when your beneficiaries get what you leave them.
While many people create trusts to protect eligibility for public benefits or avoid the probate process, there are many other important estate planning goals a trust may help you accomplish.