A trust provides legal authority to allow others to manage your assets if you become incapacitated as a result of an accident or a medical condition. It allows you to set guidelines as to how those assets are to be used to support you and those who are dependent on you for their support. In the absence of such authority and guidance, it is more likely that a Court will become involved in the management of you and your assets. Court involvement increases the expense of such management and makes it more likely that your wishes will not be considered.

You should consider a long-term trust which continues after your death because it can protect your assets for your intended beneficiaries so that those assets do not end up in the hands of creditors or former spouses of those beneficiaries. Many (perhaps most) individuals do not have the training to make investments, so a trust provides a way to provide for professional investment management. A trust can also be used to provide a discipline as to when the assets can be used for consumption. There is research which indicates that, in the absence of a disciplined approach to the management of inheritances, 80% of inheritances have disappeared within two years. Not only is this a waste of savings created over a lifetime, it can leaves many heirs with feelings of guilt, shame, and failure.

A trust also can provide for a detailed plan for the use of your assets in the event of an unanticipated death order. For example, you may become incapacitated and your child could pre-decease you leaving grandchildren who are not yet adults. In the absence of a trust, those grandchildren will be entitled to receive the inheritance you intended for your children on the grandchild’s 18th birthday. This is rarely a good thing