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What specific ways could trusts be used for estate planning?

For too long, many people have believed the misconception that only wealthy individuals should utilize certain estate planning tools. In particular, numerous Arkansas residents may have believed that trusts are only used by individuals with a considerable amount of money to pass on to their loved ones. However, this planning tool could actually benefit those at any income level and for various reasons.

Trusts are versatile planning tools. Individuals can create a trust for a specific purpose often in efforts to help loved ones in the future. For example, people with special needs loved ones may wish to create special needs trusts. This type of trust can allow the loved one with special needs to receive his or her inheritance without jeopardizing the chances of qualifying for needed government benefits. Because most benefits are based on financial circumstances, including income, a sudden windfall could negatively affect the chances of receiving benefits unless they are kept separate, which a trust can do.

Additionally, some people may simply wish to have more control over the way their heirs use their inheritances. A spendthrift trust could allow individuals to indicate that only certain amounts of money should be distributed to beneficiaries at certain times. These instructions could prevent beneficiaries from spending all of the assets irresponsibly.

These two examples only scratch the surface of the many ways individuals at any income level could benefit from trusts. If Arkansas residents have questions about the specific ways to use this planning tool, numerous resources are available for gaining information. Of course, it is often wise to obtain professional assistance when thinking about creating a trust, and experienced estate planning attorneys could help.

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