Why Trusts Matter When You Want Your Money, Your Wishes and Your Legacy to Last

Key Takeaways:
  • Planning for the future is critical to reducing your stress later in life.
  • A trust is a versatile estate planning tool that brings clarity to your finances.
  • Establishing a trust can help you cover healthcare expenses as you age.

 

Americans are living longer than ever. That’s good news, but it also raises an important question: Will your finances keep pace with the life you hope to live?

Many people avoid thinking about their long-term financial needs because the topic feels overwhelming. Yet this often leads to more stress, not less. One of our clients once put it perfectly: “The reason I don’t worry a lot about money is because I worry a little bit about it every day.”

Building a long, confident life requires regular planning and structure. A trust can play a central role in this process.

Establishing a Trust Plan Helps to Organize your Finances

Trusts are not only for the wealthy. A trust can be a solution for anyone who wants to seamlessly manage assets, direct inheritances and provide for family members. One of the immediate benefits of establishing a trust is the clarity it brings to your financial life.

A trust forces you to think about:

  • What you own
  • How it should be managed
  • Who should handle decisions if something unexpected happens
  • How to protect your family from unnecessary stress

Avoiding these questions today often creates significant burdens tomorrow. Without a trust in place, your family could be left sorting through assets, paying bills, filing tax returns, gathering documents for probate and handling complex decisions during an already difficult time.

Having a trust managed by a professional trustee means these tasks will be handled by a seasoned expert. And your family members will be able to focus on being there for one another instead of navigating financial chaos.

 A Trust Allows you to Be Flexible

Longer lives come with more transitions: career shifts, family changes, relocations, health events and unexpected opportunities. Establishing a revocable living trust, which is fully changeable and voidable while you’re alive, gives you the flexibility to change your mind as your circumstances shift.

As your circumstances change, you can:

  • Update beneficiaries
    Keeping your beneficiaries current helps to make sure your assets go where or to whom you intended. As your family evolves, you can add in-laws or grandchildren or remove relatives who should no longer be included.
  • Change your successor trustee
    A successor trustee is the person or institution you’ve named in your trust document to manage the trust when you are no longer able to do so. You can reassign this role at any time.
  • Revise how assets should be distributed
    In addition to updating your beneficiaries, you can alter how your assets are to be distributed. For example, you may wish to increase a beneficiary’s share or modify the timing of distributions.
  • Adjust plans to reflect new goals or realities
    Things we think will happen in life may not always come to pass. One of the benefits of a revocable living trust is the ability to adapt it to your current reality.
  • Incorporate new assets, property or accounts
    You may have acquired a new vacation home, business or retirement account since you first established your trust. Adding it to your existing trust can help to ensure it passes to your beneficiaries in accordance with your wishes.

Your trust becomes a long-term structure that grows with you rather than locking you into decisions made decades ago.

A Trust Can Support your Future Healthcare Needs

Healthcare spending often increases with age. Depending on your needs, the healthcare costs you incur later in life could be significant. An analysis from the Peterson Center on Healthcare and KFF showed that in 2022, despite making up only 31% of the U.S. population, people 55 and over accounted for 54% of total health spending.

A trust can help you fund and manage increasing healthcare expenses. Certain types of trusts, such as a care management trust, can be set up to provide ongoing care throughout your lifetime and directives for your trustee. Others can protect your assets for Medicaid eligibility and pay expenses not covered by insurance.

Establishing a trust plan today means you won’t have to worry if your healthcare costs will be covered tomorrow. You also can feel confident knowing you’ll have control over your care.

Worry Less About your Finances

According to the CDC, life expectancy in the U.S. continues to rise. While there are no guarantees in life, we can plan for the years ahead. A trust can be a powerful tool in reducing the stress we experience as older adults.

After all, if our lives are going to be longer, we might as well enjoy them.

To learn more about trust planning, reach out to an Adams Brown trust advisor today.