This guide is designed to help you understand whether you may benefit from a trust as part of your estate plan. Answer the questions below step-by-step. Based on your answers, you will see which types of trusts may be appropriate for your situation.
Step 1: Do You Want to Avoid Probate?
Question: Do you want your assets to pass to your loved ones without going through court (probate)?
- Yes → Consider a Revocable Living Trust
- No / Not sure → Proceed to Step 2
Step 2: Do You Want to Maintain Control During Your Lifetime?
Question: Do you want to keep full control of your assets while you are alive?
- Yes → Revocable Living Trust may be appropriate
- No → You may consider an Irrevocable Trust (Proceed to Step 3)
Step 3: Are You Concerned About Asset Protection?
Question: Are you trying to protect assets from creditors, lawsuits, or long-term care costs?
- Yes → Consider:
- Irrevocable Asset Protection Trust
- Medicaid Planning Trust
- No → Proceed to Step 4
Step 4: Do You Have Minor Children?
Question: Do you have children under 18 or dependents who need structured financial support?
- Yes → Consider:
- Testamentary Trust (created through your will)
- Revocable Living Trust with minor provisions
- No → Proceed to Step 5
Step 5: Do You Have a Beneficiary With Special Needs?
Question: Is any beneficiary receiving or likely to receive government benefits (SSI, Medicaid)?
- Yes → Consider a Special Needs Trust
- No → Proceed to Step 6
Step 6: Are You Concerned About Estate Taxes?
Question: Is your estate large enough that estate taxes may apply (federal or state)?
- Yes → Consider:
- Irrevocable Life Insurance Trust (ILIT)
- Credit Shelter / Bypass Trust
- Grantor Retained Annuity Trust (GRAT)
- No → Proceed to Step 7
Step 7: Do You Own a Business or Significant Assets?
Question: Do you own a business, investment properties, or significant wealth you want to control over time?
- Yes → Consider:
- Family Trust / Dynasty Trust
- Business Succession Trust
- No → Proceed to Step 8
Step 8: Do You Want to Control How and When Beneficiaries Receive Assets?
Question: Do you want to restrict distributions (e.g., age-based, milestone-based)?
- Yes → Consider:
- Spendthrift Trust
- Incentive Trust
- No → Proceed to Step 9
Step 9: Are You Interested in Charitable Giving?
Question: Do you want to include charitable giving as part of your estate plan?
- Yes → Consider:
- Charitable Remainder Trust (CRT)
- Charitable Lead Trust (CLT)
- No → Proceed to Summary
Summary: What This Means for You
Based on your answers, you may benefit from one or more of the following:
- Revocable Living Trust → Avoid probate and maintain control
- Irrevocable Trust → Asset protection and tax planning
- Special Needs Trust → Protect benefits for a dependent
- Testamentary Trust → Provide for minors
- Tax Planning Trusts (ILIT, GRAT, etc.) → Reduce estate taxes
- Spendthrift / Incentive Trusts → Control distributions
- Charitable Trusts → Support causes while gaining tax benefits
Important Note
This decision tree is a starting point only. Trust planning is highly individualized. We recommend a personalized consultation to determine the best structure for your specific goals, assets, and family situation.
Next Step
If you would like help determining the right trust strategy for you, please contact our office to schedule a consultation.
