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  • Dal Houston


Updated: Aug 28, 2022

After more than two decades as an estate planning and administration attorney, probably the most asked question from a client is whether they need a trust or not. As an attorney, I find this often seems like a loaded question because many people believe an attorney will always tell them they need a trust because the costs of creating a trust usually exceeds the costs of preparing a will. With that said, while there are countless factors that play into the decision making process, below are some factors which I would strongly consider important in such a decision.

The first factor that I consider important in the necessity of a trust is whether the client has real estate in multiple states. One of the primary purposes of probate is to change title of real estate from a deceased person to a living person. If a client has real estate in multiple states, then there will be multiple probates in each state the client owns property.

I have often seen a client have their primary operations in one state, have some type of limited real estate holdings in one or more other states, and then have limited real estate they or their spouse inherited in yet another state. In such cases, there will usually need to be a probate for each state in which the client owns real estate.

The second factor that I consider important is whether there is some type of potential conflict between the intended beneficiaries. While a trust will not necessarily alleviate all the types of in-fighting between beneficiaries, a properly drafted trust will give the estate some degree of leverage to administer the estate that it would not otherwise have in a probate proceeding.

The third factor I consider important is whether the client’s operation is fluid, meaning there are always lots of major decisions to be made. If this is the case, a trust will normally allow for an immediate and ordered means of allowing the estate to continue the ongoing business of the client.

Lastly, another factor I consider is whether one or more of the beneficiaries has some type of liability. For example, perhaps the client has a child that is experiencing marital problems, or creditor problems. The trust can take these issues into account and include provisions to protect the beneficiary from a loss.

Please note: These provisions can be included in a will and ultimately addressed by the probate court. However, they are usually much easier to resolve in a trust.

In conclusion, I want to again make clear that there can be numerous other reasons that a trust may make sense that I have not addressed in this article. These are some of the objective factors that usually dictate whether or not a client should consider a trust.

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