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No, you don't have to be a millionaire to use trusts

Parents of more moderate means tend to eschew the idea of trusts for their children. After all, most people in Oklahoma are familiar with the idea of pampered individuals living off of trust funds rather than earning their way in the world. That image might be popular for use in media, like television and movies, but trusts can actually make valuable contributions to children's futures.

Wills tend to stay in the estate planning spotlight, but trusts work well alongside wills. For instance, a will can designate how much a child will receive as his or her inheritance, but many parents worry about leaving behind large lump sums, even to adult children. Trusts allow for greater control over the entire process of doling out an inheritance. A distribution schedule can be created that clearly defines how much the inheritor receives and at what intervals of time, allowing an inheritance to be spaced out more evenly over the years.

Aside from exercising greater control over how an estate is handled upon death, trusts have another great benefit -- they are not subject to probate. Probate can be a necessary process and beneficial when needed, but not everyone's estate truly needs to go through this process. Court costs can eat up a small percentage of an estate's worth and can take months or, in some cases, years to complete. With a trust, an estate does not necessarily require court supervision to pass on to heirs, and family members can stay out of probate court.

For all of the benefits that trusts can provide, their bad image, as portrayed by popular media, has discouraged many Oklahoma residents from pursuing trusts as valid estate planning options. Perhaps one of the greatest attributes of trusts is that parents who are concerned about their children's spending habits can still leave them inheritances that can encourage more thoughtful use. With the added benefit of skipping probate, trusts are an all-around good addition to most estate plans.

Source: wisebread.com, "Should You Set Up a Trust for Your Child?", Matt Bell, Feb. 25, 2016

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