12 Reasons to Consider a Trust

By Nehemiah Jefferson, Esq., LL.M.

Trusts have become an important part of many estate plans.  

A trust is a legal document which creates an entity to hold property for the benefit of others.  Trusts come in all types of flavors such as irrevocable and revocable and can even be used for charitable and tax planning.  Of course, a trust must be “funded” by transferring assets into the trust.

Here is some basic terminology:

Grantor – the one who creates and funds the trust

Beneficiary – people who will benefit from the trust

Trustee – the fiduciary of the trust who distributes the assets according to the trust document

A Grantor can be a beneficiary and a trustee.  The grantor can wear many hats.  A beneficiary can also be a trustee.

Here are 10 reasons why you might consider a trust.

1. Avoidance of Probate |Because the individual no longer is an owner of the assets at death, the assets would not be part of probate assets.   Probate can be an expensive endeavor. 
2. Privacy | When a will is filed with the court, it becomes a public document.
3. Control | The settlor or party that creates the trust may control administration of the trust during their lifetime.   In addition, incapacity or death allows a trustee or successor trustee to maintain control.
4. Family dynamics | Children from a previous relationship or you have a second or third marriage.  
5. Asset Protection | A trust could possibly shield assets from creditors.
6. Children or grandchildren with special needs | The special needs trust is an estate planning tool that can be used to alleviate concerns regarding the future care of individuals.  A special needs trust is an irrevocable trust developed to take care of a person with special needs. This type of trust also can preserve eligibility for means-tested government benefits, for example, Medicaid or Supplemental Security Income. 
7. Finances | You have a majority of assets where you can’t name a beneficiary.
8. You have minor children |  A trust can help preserve assets for the beneficiaries.
9. Disinheritance |  Yes, children can be disinherited and much like a will, a trust could be used to do so.
10. Significant Net Worth | See Charitable and Tax Planning below.
11. Charitable Planning |  Do you have a special cause for which you want to provide for?  There are a number of trusts which can be used.  One example is a charitable remainder trust.
12. Tax Planning | A trust can help minimize estate tax burdens or even shift the burdens to future generations.  Although the Estate Tax is adjusted for inflation, you can almost be assured that the exemption amounts will change significantly with a change in presidency.  Currently, there is a $13.61 million exemption per individual.  However, at the end of 2025, this exemption amounts goes back to $7 million per individual.  The maximum federal estate tax is 40%.

Estate Planning should be comprehensive.   This means that there may be a myriad of tools used to provide client solutions.  As with any legal matter, you should consult an Attorney. This article is for educational purposes only, is not legal advice, is not a substitute for consulting legal counsel, and does not create an attorney-client relationship.

Nehemiah Jefferson, Esq., LL.M., is Principal of America’s Tax Attorney LLC. The firm provides Civil and Criminal Tax Representation to individuals, businesses, and tax professionals nationwide.  Other practice areas include Estate Planning, Probate, and Business Planning. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, Texas, The District of Columbia, and is a member of the United States Tax Court Bar. He may be reached at www.americastaxattorney.com.