Finance Quick Answers
What are some good reasons for setting up a trust?
Although setting up a trust will not get rid of all the problems associated with settling an estate, they do offer a number of advantages in estate planning.
One advantage is taxes. While it is true that the
recent changes in tax law raised the minimum size of an
estate to be subject to estate taxes, the full benefit
of the law will be phased in over time. Trusts may offer
a solution for avoiding unnecessary estate taxes.
Another advantage to trusts is probate. Because the
fees for an attorney taking an estate through the
probate process are based on the size of the estate,
having a trust can help lower the attorney’s expenses in
settling the estate.
Privacy is a big advantage to setting up a trust. The
work of trustees is not public. Since a trust does not
go through probate, the amount of your trust is not on
Protection is another important advantage that you gain by setting up a trust. In case of conflict, it is more difficult to challenge a trust than a will. A trust is a means of minimizing possible conflict between heirs when your estate is being settled.
Source: CFE inTOUCH March 1998, p. 7
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri Extension
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Saturday, July 26, 2008