Eric Sheldon CPA, PC

At What Net Worth Do I Need A Trust?

You may have heard the misconception that you need to be wealthy to have a trust. That is not true. You don’t have to be a millionaire to set one up. A trust can be a useful estate planning tool for many people, including mixed families, those who inherit money, and people you care about.

 

According to this CNN/Money article, “If you have a net worth of at least $100,000 and have a substantial amount of assets in real estate, or have very specific instructions on how and when you want your estate to be distributed among your heirs after you die, then a trust could be for you.”

 

Trust Uses

There are many types of trusts [link to new blog post], which are dependent upon the grantor’s preferences and goals. Each type has pros and cons [link to new blog post], which you should discuss with an estate-planning professional before choosing.

 

Trust Qualifications

There is no required minimum value required of a trust. An attorney will charge a fee to draft a trust agreement, however, so it might not make sense for someone of very modest income to create a trust. The cost varies around the country and based on how complicated the trust is. Fees generally range from $500 to $3,000. Many institutional trustees impose a minimum annual fee for serving as trustee, so again it might not make sense for someone of modest means to create a trust with an institutional trustee.

 

Let us know if you’d like to discuss how a trust may help you.

 

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About the Author

Eric Sheldon

Eric Sheldon

Eric Sheldon is a certified public accountant with more than 25 years of experience in a wide variety of industries. He's the owner/operator of Eric Sheldon CPA, PC, an accounting firm that specializes in providing tax strategy and preparation, accounting, and bookkeeping services to individuals and small business owners.

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