When do you need to set up a trust?

A trust is a very useful estate planning tool. Need depends on the size of your estate since a well drafted trust may cost a couple of thousand dollars or more depending on the complexity and the trustees may need to be compensated for their management of the trust. However, even simple estates can benefit from estate planning. Generally, a person sets up a trust in order to remove property from their personal ownership. Transferring real property to a valid trust protects it from creditors and lawsuits and can be used as a way to bypass probate. A trust can specifically designate how the trust property will be distributed outside of inheritance law, or hold property and continue to distribute the profits to the beneficiaries.

A trust should always be drafted by a professional who specializes in trust law, to fit your personal needs. Generic trusts can be extremely risky, resulting in errors that can be extremely costly to correct.