Trust Planning 101: What are Trusts, Who Needs Them, and Why?

What exactly is a trust, and do you really need one? Attorneys Haley Matson and Jane Dearwester tackle these questions head-on in our latest episode, breaking down complex legal concepts into practical, actionable information.

Think of a trust as a private container for your assets with specific instructions attached. Unlike the common misconception that trusts are exclusively for the wealthy, they serve numerous practical purposes for everyday people. Single parents protecting inheritances for minor children, individuals with disabled family members, business owners safeguarding their enterprises, and property owners with real estate in multiple states all benefit significantly from trust planning.

We explore how trusts offer superior asset protection compared to traditional wills, helping shield your hard-earned resources from creditors and providing controlled distribution to beneficiaries. For those concerned about potential long-term care needs, specialized trusts can help preserve assets while qualifying for government benefits. Most importantly, trusts give you remarkable control over your legacy - allowing you to specify not just who receives your assets, but how and when they receive them.

Not everyone needs a trust, and that's okay too. The key is understanding your unique situation and planning accordingly. Whether you're concerned about protecting minor children, managing complex assets, or simply want to avoid probate, this episode provides the foundational knowledge you need to make informed decisions about your estate planning. Ready to take the next step in securing your legacy? Visit our offices in Charlotte, Hendersonville, or Shelby for a personalized consultation.

Episode Transcript

Haley Matson (00:00):
Hello everybody, welcome to Elder Law Report.
I'm attorney Haley Matson andI'm here with attorney Jane
Dearwester.
Hi there, and today we're goingto talk about trusts.
What are they, who needs themand why should you get them?
So we're going to start offfirst with what is a trust.

(00:21):
So, at the very basics, it'sgoing to be a private written
document that sets up kind of abucket for you to title assets
into and then provideinstructions on where those
assets go.

Jane Dearwester (00:37):
Yeah, very simply put, and I think that's
great.
I think an important thing toremember about trusts again, the
importance that they are aprivate document that you kind
of get to hold close to thechest and, like with all estate
planning documents, it can bechanged right, because it's
words on paper.
So we can set up your trustinitially and as things change,

(00:59):
as they inevitably do over thespan of your lifetime, you can
do amendments.
You can start over from scratch, but most of the time, once we
set a trust up, as things changewe can really just do trust
amendments to do the changesover time.
So, yeah, perfect.
The second part is who needs atrust, and this is one I usually

(01:22):
use myself as an example.
I worked with Greg McIntyre toset up my trust last year
because I'm a single parent, sothe sole heir of my estate is a
minor and can't leave realestate or other assets to minors
, and so we set up a trust.
My house is now in the trust.
Now in the trust, the trust isnow the beneficiary of my life

(01:44):
insurance policy and evenwithout, you know, minor heirs.
There are other situationswhere people who have heirs in
their family, who may bedisabled or have special needs
or really, if they have, maybesomeone in their family with a
shopping addiction or a drugaddiction, unfortunately, that

(02:05):
they don't want to just get abig sum of money, that they want
the trustee to be morediscretionary that is a great
candidate for somebody who mayneed a trust.
Additionally, someone who ownsreal property in multiple states
, that's a good candidate for atrust because you can put all
those properties into one trustto protect and manage those

(02:28):
assets.
Small business owners againgreat candidates for trust
creation because you canactually put your business
within the trust to furtherprotect your business.
And of course, what we see alot and use trust to help our
clients with is planning forlong-term care.
We may need to set up aMedicaid asset protection trust

(02:53):
or an irrevocable trust to helpour client or their loved ones
qualify for that governmentbenefit.
And that's just a handful ofexamples, and of course there
are others, but hopefully thatgives you a little outline of
who are the clients that wetypically set up trust for.
And then we've kind of got thewhy.

(03:14):
I'll ping Paul back over toHaley, for why do we do trust?
Sure.

Haley Matson (03:20):
We do trust primarily for asset protection,
so a lot of those who needs atrust are really also going to
kind of be our why.
Why would you need a trust forthat asset protection?
Like Jane said, if you haveminor children and your money
and what you want to give toyour kids just goes through your

(03:41):
estate, you're risking themgetting a lump sum or having it
be managed by a guardian maybecourt appointed Whereas if you
have it in a trust, then you'vegot a trustee who you know and
trust, who can get it to thosechildren when they need it.
Additionally, if we're lookingat, like long-term care, those
Medicaid asset protection truststhat we were discussing, this

(04:02):
is really an area where, withoutthe trust, the assets are going
to be out there and are goingto be subject to different
claims from Medicaid.

Jane Dearwester (04:12):
Yeah, not to mention, trust creation provides
a lot of tax advantages.
Avoiding probate that's the bigthing we were talking about
before we got on here.
That's a huge reason to put atrust in place to avoid your
assets from going through aprobate estate so they're not
subject to creditor claims.
Again, you can give veryspecific instructions within

(04:47):
your trust, where you don'tquite have the same level of
flexibility in a will that youtrust, because you can say who
you want to have your assets ina will, but you don't have the
discretion that you do in atrust for, as Haley said, a
trust for, as Haley said,parceling out the money in
insurance or focusing on highereducation if you're a young
person.
So, yeah, I think, justunderstanding what trusts are, I
think a lot of people havemisconceptions about what a

(05:09):
trust is.
Some people I see it both ways.
Some people think it's way moresimple than it actually is and
others think it's way morecomplicated.
I can say from my experience Ihave people coming in who are
resolute that they need a trustand once we sit down, talk with
them, we've determined you don'treally need one.

(05:31):
If you want one, we'll draftone for you, but you don't
really need one.
So this is the reason to meetwith a professional, to come
into one of our offices eitherin Charlotte, where Haley is,
hendersonville, where I am, orour other office over in Shelby
to have a personalized,customized conversation about

(05:53):
what's going to be best for you,and then the attorney you meet
with will be able to make arecommendation and explain to
you the who, what, why, why youneed to trust, what kind of
trust and how this is going tobenefit you and your loved ones
moving forward.

Haley Matson (06:09):
Yes, yes.

Jane Dearwester (06:11):
Great Well, I think that pretty much wraps it
up for the basic Trust 101.
And like we look forward toseeing y'all come into our
office to ask some more specificquestions, and we will see you
on our next Elder Law Report.

Haley Matson (06:28):
Sounds good.
Thank you, Jane Cheers.