There are a number of reasons that Ohio residents might want to use trusts as a component of their estate plan. In addition to avoiding probate, which is not private and can be expensive, trusts allow assets to be managed in a variety of ways both while the settlors are alive and after their death. For example, there are certain types of trusts that can protect assets from creditors. A trust might also be used to manage people’s financial affairs if they do not want to actively do so.
A trust could be beneficial for a beneficiary who wishes to start a new business. The trust could be set up to provide a steady income stream to the person that cannot be touched if the business fails.
For loved ones who are inexperienced in managing money, a trust can be set up so that beneficiaries get distributions but do not control the trust. Trusts may also be created to help reduce estate tax.
People who are creating an estate plan may want to discuss their goals with an attorney to find out whether a trust could be a good solution in some cases. While trusts can be good tools for managing a large estate, they are not simply useful only for wealthy people. For example, if a person has a relative who is disabled and gets government benefits, a special needs trust can provide for that relative without affecting the eligibility for government benefits. A trust can be set up to safeguard money for minor children. A person may want to specify that a loved one only gets distributions after reaching a certain age or a milestone such as graduating from college. A trustee might also have the responsibility of deciding when to allow distributions.