Protecting Your Assets: A Guide to Trusts for Seniors

A trust is a legal arrangement in which a trustee holds and manages assets on behalf of a beneficiary. The trustee has a fiduciary duty to act in the best interests of the beneficiary and to follow the terms of the trust.

Seniors may use trusts to protect their assets and ensure they are distributed according to their wishes after they pass away. Trusts can also be used to provide for loved ones who have special needs or who may not be capable of managing their own finances.

There are many types of trusts, including revocable trusts, irrevocable trusts, living trusts, testamentary trusts, and special needs trusts. The type of trust that is best for a senior will depend on their individual circumstances and goals.

Setting up a trust typically involves working with an attorney who specializes in estate planning. The attorney will help the senior choose the right type of trust, draft the trust document, and transfer assets into the trust. It is important to choose an attorney who has experience working with seniors and who is knowledgeable about the specific laws in the senior’s state.

Using a trust can provide several benefits for seniors, including avoiding probate, protecting assets from creditors and lawsuits, and ensuring that assets are distributed according to the senior’s wishes. Additionally, trusts can provide tax benefits and can be used to provide for loved ones who have special needs or who may not be capable of managing their own finances.

There are some potential downsides to using a trust, including the cost of setting up and maintaining the trust, the loss of control over assets placed in the trust, and the possibility of disputes between beneficiaries. It is important to weigh these potential downsides against the benefits of using a trust and to work with an experienced attorney to ensure that the trust is set up properly.

In most cases, it is possible to make changes to a trust after it has been created. This is typically done through a process called trust amendment. However, it is important to work with an attorney to ensure that any changes are made in accordance with the terms of the trust and with applicable state laws.

While a will is an important part of any estate plan, it may not provide the same level of asset protection and control as a trust. A will must go through the probate process, which can be time-consuming and costly. Additionally, a will may not provide the same level of protection from creditors and lawsuits as a trust. Seniors should discuss their options with an attorney to determine whether a trust is right for them.