A trust is often seen as a key estate planning tool, but do you actually need one? Many people assume that trusts are essential for every estate plan, but the reality is that trusts are only beneficial when they serve a specific purpose.

At Harvell & Collins, we take a careful, individualized approach to estate planning, ensuring that each client receives the right guidance tailored to their needs.

What Is a Trust?

A trust is a legal agreement that allows one party (the trustee) to manage assets on behalf of another party (the beneficiary), based on the instructions of the creator (grantor) of the trust.

Trusts can be established during a person’s lifetime or upon their passing through a will.

At its core, a trust serves one major function—control. It allows assets to be distributed in a structured manner rather than given outright to beneficiaries.

When Is a Trust Necessary?

Not everyone needs a trust, but in certain situations, a trust can offer significant advantages. Here are some of the most common reasons for setting up a trust:

1. Blended Families & Second Marriages

A spousal trust is useful when a person wants to provide for their surviving spouse but ensure that remaining assets go to children from a prior marriage after the spouse passes away.

� Example: A man remarries after the death of his first wife. He wants his second wife to live in their home for the rest of her life but ensures that upon her passing, the home is sold and the proceeds go to his children.

2. Protecting Assets from Divorce & Lawsuits

A spendthrift trust is designed for individuals who want to leave assets to their children but protect them from divorce settlements, lawsuits, or creditors.

� Example: A parent wants their estate to go to their adult child but fears that if the child divorces, the spouse could claim part of the inheritance. A trust keeps those assets separate from marital property.

3. Minor Children or Special Needs Beneficiaries

A trust for minors ensures that young children do not inherit large sums of money all at once but instead receive structured distributions over time.

Similarly, a special needs trust ensures that a child receiving government benefits continues to qualify for assistance while also receiving financial support.

� Example: Parents of a special needs child want to leave money for their care but avoid affecting their eligibility for Medicaid or Social Security benefits.

4. Long-Term Care & Asset Protection

An asset protection trust can safeguard assets from nursing home costs and Medicaid recovery. With skilled nursing care now costing $8,000 to $10,000 per month, many families turn to trusts to protect their home and savings from being depleted.

� Example: A couple places their home into an irrevocable asset protection trust five years before applying for Medicaid, ensuring their children inherit the property rather than it being used to pay for nursing home costs.

When Is a Trust NOT Necessary?

Despite the advantages of trusts, not everyone needs one. If an individual has:
✔ A simple estate with no minor children or special needs beneficiaries
✔ No concerns about divorce, lawsuits, or long-term care costs
✔ An estate that can pass efficiently through a will

Then a trust may not be necessary. At Harvell & Collins, we don’t recommend trusts unless there is a clear benefit.

Selecting a Trustee: A Crucial Decision

The trustee is responsible for managing and distributing assets according to the terms of the trust. This could be:
� A trusted family member (often referred to as "the perfect child")
� A close friend or business associate
� A professional trustee, such as a bank or law firm

If a primary trustee is unable to serve, it’s critical to have backup (successor) trustees named in the trust.

Key Takeaways

✅ A trust is a contract that helps control how and when assets are distributed
✅ Trusts are valuable for blended families, asset protection, and special needs planning
✅ Not everyone needs a trust—estate planning should be customized to your unique situation
✅ Choosing a trustee is one of the most important decisions in setting up a trust

Need Estate Planning Guidance?

If you’re wondering whether a trust is right for you, our attorneys at Harvell & Collins can help you make the best decision for your family.

� Call us today: (252) 726-9050
� Visit us online: HarvellandCollins.com

� Plan wisely. Protect what matters. �