Should everyone have a trust?

More than once, a family member or friend has come to me saying something like, "My friends Jim and Margaret were talking with me about how they have a trust. They said that everyone should have a trust to avoid probate. Do I need a trust?" Some people, who are even more certain of their need for a trust and have come to our office for the specific purpose of having us draft a trust.

Some people need trusts; others don't. I encourage clients to think about an estate planning consultation like a visit to the doctor. A patient may have learned from the Internet, friends, or TV commercials which drug(s) or treatment(s) work well, but a good doctor won't just take the patient's word without independently assessing the situation, talking with the patient about his or her experience, and presenting options that allow the patient to make an informed decision. Consulting with a lawyer about your estate plan follows the same pattern.

Trusts can serve many purposes, such as avoiding probate and providing flexibility in the distribution of assets. However, trusts may not be the most cost-effective and efficient way of meeting a person's estate planning goals.

Beware of people who are ready to sell you a trust without knowing anything about your situation. Some companies sell pre-packaged "trusts-in-a-can" to anyone who walks through the door with little thought to the client's needs or the implementation of a comprehensive estate plan. These plans can end in disaster. Michael J. Keenen, noted blogger on Connecticut Elder Law, has a good post on the dangers of trust mills and some links to related lawsuits.

To sum it up:

Are trusts excellent estate planning tools for some people? Absolutely.

Does everyone need a trust? No.

However, you should know and understand your current estate plan, whatever it is, and have it reviewed periodically, especially if you have had significant changes in your life.