The short answer is because a lot of things can go wrong, and you can protect your beneficiaries from some of the effects of these problems by leaving assets in trust. Our job is to figure out what might go wrong and see if you care.
We will look at your relationships, your lifestyle, your assets, and your goals and determine the risks you and your family face. We then discuss the different ways to prevent those problems from occurring. With that knowledge, you can make a reasoned determination as to what level of protection you wish to provide your beneficiaries.
Trusts are one of the tools that we use to accomplish our clients’ objectives. You can choose how they are taxed, who makes decisions about trust assets, when the decision-maker is removed, who gets the benefit of the trust, how long the trust lasts, and what kind of protections they provide. You can create trusts that protect your beneficiaries from numerous problems and still leave them in control of the assets. Or you can create trusts to protect your beneficiaries from themselves.
We have seen inheritances lost to creditors, divorcing spouses, debilitating injuries, bad decisions, tax liens, nursing home costs, accidental disinheritance, and elective shares. Deciding not to protect against these risks is a valid option. But deciding not to think about them is irresponsible.
You have the opportunity to provide protections for your beneficiaries that they cannot create for themselves. We are all one mistake away from losing everything we have worked for. That does not have to be the case with an inheritance. Leaving assets to your beneficiaries in trust shows them that no matter how life treats them, you cared enough to make sure their inheritance was protected.