Why Not "Trust" Yourself

Monday, April 2, 2018

Why Not "Trust" Yourself

Every estate planner will tell you that you should have a will, and they are right. Basic estate planning documents like a will, power of attorney, etc. are a real necessity for almost everyone. However, many people think of trusts as something only ultra-wealthy people need and that they are unnecessary for “regular” folks like you or me.

A significant transition has been taking place over the last 20 years where more and more people are using revocable living trusts to manage their estates. There are many good reasons for the growth of trusts as the core estate planning document for people from all walks of life. 

The traditional benefit of trusts, probate avoidance, continues to be a motivating factor. Avoiding the need for an estate can increase privacy, reduce costs and provide for faster distribution of assets to family.

More and more a key concern is what happens during your life rather than what happens when you die. Due to advances in modern medicine the number of cases of dementia and Alzheimer’s has been rising steadily. As a result, people need assistance with their financial affairs while they are still alive. A revocable trust in conjunction with an appropriate power of attorney can allow a smooth transition in the event of incapacity. Bills continue to get paid without interruption, and existing family support can be continued.

Many grandparents assist with college or other expenses for their grandchildren. Others have children or grandchildren with special needs. A properly drafted revocable trust can make sure that your support continues even if you are unable to manage this yourself. 

Revocable trusts are extremely flexible and can be modified to suit your circumstances no matter how they might change. They can even be revoked if they no longer serve a purpose. Revocable trusts also do not have to be fully funded or hold all of your assets to be effective. Many trusts are only partially funded at creation with additional assets added later as appropriate. A power of attorney and a pour over will can assure that proper funding will take place if the unforeseen should happen.

There is one major issue that must be addressed in any revocable trust. While you can initially be your own trustee, you must name a successor trustee to take over when you are no longer able. This is probably the most important decision you will need to make and the correct answer depends on your specific situation. For simple situations a family member can be a good choice. 

For someone with more substantial assets using a professional trustee has significant advantages. A team with trained investment managers and trust administrators can make sure that your assets are properly managed and that family strife is avoided. First Merchants Private Wealth Advisors has been partnering with individuals and families to provide comprehensive solutions and personal service in pursuit of a secure financial future for 125 years.

A revocable trust can do everything that a will can do and much more, often with less effort, time and expense. If you would like to learn more, please feel free to contact David Forbes at dforbes@firstmerchants.com or (317) 844.2710.


David Forbes, Director of Personal Trust

Investment Management solutions provided by First Merchants Private Wealth Advisors may not be FDIC insured, are not deposits of First Merchants Bank, and may lose value. Investments are not guaranteed by First Merchants Bank and are not insured by any government agency.  This material has been prepared solely for informational purposes. First Merchants shall not be liable for any errors or delays in the data or information, or for any actions taken in reliance thereon. Any views or opinions in this message are solely those of the author and do not necessarily represent those of the organization.