First off, let’s get rid of the term “estate planning”. The phrase gives the wrong idea to people; it conjures up images of Rockefeller types playing polo on their massive estates.

The new phrase is “wealth preservation” because that is the ultimate goal. You are probably in the latter part or beyond the wealth accumulation stage. You need to “preserve” your estate against the tax authorities and potential litigants during lifetime, then against judgment creditors and potential ex-spouses for your children.

Trusts are the under-used and misunderstood vehicle to reach your preservation goals:

  • Want to minimize your estate tax liability – use a trust
  • Want to have assets available for your children, then grandchildren – use a trust
  • Want to protect assets that you leave for your surviving spouse against unscrupulous third parties and judgment creditors – use a trust
  • Want to protect your children’s inheritance against creditors and divorce claims – use a trust
  • Want to create a “family bank” for multiple generations of family members – you guessed it, use a trust