Estate planning is an important process, as your estate plan documents often determine how your assets are distributed after your death. Without a will or other documents, the courts could decide who gets which assets. And the courts may make decisions that you wouldn't choose for yourself. A will can help make sure that your assets are distributed according to your wishes, but there are some things a will can't do. In some specific situations, you may need a trust in addition to a will. Here are a few of those situations in which a will may be necessary:
You have a blended family. Do you have kids from a previous marriage? If so, do you want to provide support for your spouse but also maintain assets for your kids from your earlier relationship? With a will, you can only decide who to leave assets to. So, if you leave your financial assets to your spouse, he or she can then decide whom to leave the assets to upon his or her death. There's a chance your children could be cut out of your estate.
With a trust, you can carve out specific assets from your estate and use them to generate income for your spouse while he or she is alive. Then, when he or she passes away, the assets could be left to your children. That way, you meet both goals of supporting your spouse after your death and taking care of your kids.
You want to control distribution. With a will, you can state who gets what assets. However, you can't control when or how they get the assets. That could be a problem if you're concerned that your heirs will spend all the money quickly or if you want to tie the distributions to certain achievements, like graduating from college. The only way you can achieve those types of goals is with a trust. In a trust, you can specify exactly how your heirs will receive money, which can protect against them being spendthrifts or against them not working or continuing their education after receiving the inheritance.
Your heirs need help managing the money. Are you leaving a substantial amount of money to someone who may not be able to manage money on their own? Perhaps they're a minor child or they have a physical or mental disability? Again, with a will you can only direct that they are to receive certain assets. You can't control how the money is managed.
With a trust, though, you can establish a trustee and a money manager. They can invest the money for your heir's benefit and control how they receive the money. Then, if and when your heir is able, the trust can release the inheritance to them.
For more information, talk to an estate planning attorney. They can help you decide if a trust is right for you.