Estate Planning Mistake: Not Having a Trust

Another Estate planning mistake is not having a Trust. Attorney Chris Berry discusses the Issue of not having a Trust in this episode of Daily Wisdom.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.


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Episode Transcript

Castle Trust Can Protect You and Your Beneficiaries

This is Chris Berry with Castle Wealth Group. We’re going to continue the theme of talking about estate planning mistakes. Today we’re going to talk about the estate planning mistake of not having a trust. If you like this information, please make sure to subscribe to our YouTube channel.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications such as Forbes, Kiplinger’s, Crain’s Detroit and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning and as author of the Amazon best selling book, The Caregiver’s Legal Guide.

Not everyone needs a trust. Now, let me get that out of the way. Not everyone needs a trust. A lot of the trusts that I review are just basic revocable trusts where maybe you don’t even need that type of trust. Instead, you might want what’s called a legacy trust or a castle trust. A legacy trust can protect your beneficiaries. A castle trust can protect your beneficiaries and protect you. But why I say not having a trust is a mistake is you need to understand how assets pass upon death.

So first, we have joint ownership. So if you’re a married couple, joint ownership is a great way to pass assets because if you pass away, it just goes to your spouse. From a tax perspective, makes a lot of sense. The second way would be through beneficiary designations. That’s great for a spouse, but naming a child or a loved one as a beneficiary, if they’re not your spouse, might be a mistake. We’ve talked about that before. Because of two reasons, one, their own poor financial mismanagement, which typically isn’t an issue. But, two, the big concern is the outside environment: divorces, creditors, lawsuits, bankruptcies, et cetera. So that brings us to the third way that we can pass assets and that’s through a trust.


Different Types of Trusts

There’s different types of trusts. We have revocable living trusts. We have legacy inheritance trusts. We have castle trusts. We have irrevocable life insurance trusts. We have a state tax trust. There’s lots of different types of trusts out there. I guess that’d be almost a total mistake is not having the right type of trust, not just not having a trust, but not having the right type of trust. Because I see a lot of people that have the wrong type of trust, where they’re trying to avoid probate and protect their kids, but they just have a trust that avoids probate that does not protect their kids. That’s why whenever we review, we do what we call an estate planning audit to figure out, what type of trust do you have? Or maybe, what type of trust should you have?

But, again, if the asset doesn’t pass through joint ownership, beneficiary designation trust, then it ends up going into probate. So of those options, if you’re leaving things to loved ones other than a spouse, you’re probably going to want to rely on a trust. You don’t want to rely on probate because that’s a court process. You don’t want to rely on joint ownership because that’s its own mistake and that could have some bad tax consequences as well as some fiduciary issues. Then you don’t want to rely on beneficiary designations because then it’s a outright distribution. And now, if that child were to a divorce, lawsuit creditor action bankruptcy after you pass away, well, everything you’ve worked so hard for might go in a direction that you don’t want.



So that’s why a lot of times, now, not always, but a lot of times, depending on what your goals are, a trust would make the most sense because they can avoid probate. If it’s structured properly, it can protect your kids. Again, if it’s structured properly and you have the right type of trust, it can protect you from creditors as well as that devastating cost of long-term care. That’s something that a trust can provide the joint ownership, beneficiary designations, and probate cannot. So if you want an efficient, effective way to protect the next generation, then a lot of times you’re going to look at a trust as the estate planning tool to utilize.

Then it’s just a matter of, what type of trust do you want? Do you want a basic revocable trust that avoids probate? Do you want a legacy trust that avoids probate and protects the kids? Or do you want a castle trust that avoids probate, protects the kids, and then also protects you from lawsuits as well as long-term care costs? So this has been Chris Berry, Castle Wealth Group. Hopefully, you found this informational. Make sure to subscribe to our YouTube channel. Thank you.

Castle Wealth Group has clients across the nation and helps families plan, protect and preserve what is important by creating a retirement and legacy blueprint.



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