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3 reasons middle-class adults decide to create trusts

On Behalf of | Jul 5, 2022

Your California estate plan can be as simple or complicated as you want to make it. The more family members and assets you have to consider, the more involved your plan might become. For many people in California, a simple will is not adequate for their estate planning needs.

Many middle-class adults would benefit from including a trust in their estate plan but fail to do so because they have a restrictive idea about the uses and purposes of a trust. What are some of the common reasons people add trusts to their plans?

They think they might need Medicaid

If you think you may require Medicaid benefits in the future for nursing home care, advance planning can help you qualify. A trust can also help you protect some of your property, like your home, from Medicaid estate recovery efforts.

They worry about debts as they age

Supporting yourself during retirement is a challenge even if you have saved for decades. Issues like inflation and unexpected emergencies can leave you with far less than you expected during your retirement years. You can even face lawsuits from your creditors, and a trust can help protect some of your property from creditor claims.

They think their family will fight

Whether you have children who argue with each other frequently or a family member with mental health or substance abuse issues, you may worry about problems arising during probate proceedings. A trust leaves more thorough instructions and is harder for people to challenge and probate court.

Understanding the uses of different estate planning tools can help you plan for your golden years and for the legacy after your death.