Estate planning is an important part of financial security, and a revocable living trust can be a useful tool for many individuals, families, and business owners. Although trusts are sometimes thought of as only for the ultra-rich, they can be beneficial regardless of age or net worth. The minimum net worth necessary to consider a revocable living trust will vary from state to state. If you decide to create a revocable living trust, it is important to deposit your assets into the trust and update your beneficiary designations.
This will ensure that your trust is worth more than the money you spent on it. Even if your net worth does not qualify you as prosperous, you may still benefit from a living trust. Your individual net worth is a factor if you plan to hire a corporate trustee, such as a bank, trust company, or investment firm. Each state has laws that determine the net worth that can be passed on to beneficiaries without going through probate court.
If you plan to act as your own trustee, your net worth may not need to be as significant. Estate planning can be difficult and complex, especially for high net worth individuals (HNWI). If you want your assets to pass quickly, specifically, and privately to your heirs, it may be worth considering a trust. Trusts are not just for the wealthy; they can be beneficial for anyone with assets titled in their own name.
If you want to plan for possible mental disability, it is worth considering a revocable living trust regardless of your net worth. For married couples with substantial net worth, a credit shelter trust (CST) can help them or their heirs avoid estate taxes. Living trusts are not necessary for everyone, but they have certain uses that make them worthwhile. The best way to determine the minimum net worth needed to benefit from a living trust is to review state small estate laws.
