3 things a trust does that a will does not

A will is a key part of any Massachusetts estate plan, but a will’s power only extends so far. If you have specific state planning goals a will does not help facilitate, you may be able to accomplish them by establishing one or more types of trusts.

Kiplinger notes that a trust is a fiduciary agreement between two people: you, the settlor, and the person you appoint to oversee the trust’s distributions, who becomes your trustee. The following are some of the main reasons people creating their estate plans choose to supplement them with trusts.

Trusts help maintain public benefits eligibility

Certain types of government aid require recipients to participate in means-testing to make sure they truly need the help. If any of your beneficiaries collect means-tested public benefits, leaving them too much money may hurt their eligibility moving forward. However, you may get around this by leaving those parties’ assets in a trust, because assets in trusts do not factor in when means-testing takes place.

Trusts offer protection from creditors

When you place assets in a trust for a beneficiary, you also protect those assets from the beneficiary’s creditors. Creditors may not touch the assets in a trust, because they are technically the property of the trustee.

Trusts help control and manage spending

Another popular reason you may want to create a trust is if you have fears about a beneficiary blowing through your legacy. With a trust, you have the option of instructing your trustee to distribute assets only under certain circumstances, helping protect a spendthrift child from him or herself.

While these are among the most common reasons for establishing trusts, there are many other reasons creating one may benefit you.