When should I set up a trust? Do I need one at all?
It depends on the size of your estate and the purpose of the trust. For example, if you
mainly want a living trust to protect assets from taxes and probate but your estate is
under the current federal tax floor ($625,000 for 1998 and $650,000 for 1999) and small
enough to qualify for quick and inexpensive probate in your state, some lawyers would tell
you it isn't worth the cost. However, a trust can do a number of things a will can't do as
well unless the will establishes a trust or pours over into a trust. If you want to avoid
a court hearing if you become incompetent or unable to provide for yourself, or if you
want to provide for grandchildren, minor children, or relatives with a disability that
makes it difficult for them to manage money, a trust has many advantages. If you have a
trust, your trustee can manage assets efficiently if you should die and your beneficiaries
are minor children or others not up to the responsibility of handling the estate. And a
trust can protect your privacy; unlike a will, a trust is confidential.