How a Trust Can Safeguard Your Inheritance: Beyond the Will

By – Jackson Wegner – CFP®

Planning for the transfer of wealth and assets to future generations is a significant consideration for many individuals. While a will is a common estate planning tool, it may not provide the level of protection and control that a trust can offer.  

A trust can be a powerful instrument for safeguarding your inheritance and ensuring that your wishes are fulfilled. It can provide enhanced protection for your assets and offer greater flexibility compared to a Will. When designed correctly, a trust can help your heirs bypass the costs, delays, and headaches that often arise from probate proceedings.  

For more than a decade, The Hadary Team has worked with individuals and families to determine if a trust is suitable for them. Serving a diverse client base, we have helped corporate executives, retirees, and individuals who encounter ‘sudden wealth’, such as entertainers and those who receive a significant inheritance. 

We work with each person to understand their unique situation. If a trust makes sense, we present and explain, in layman’s terms, how it works. The trust is often just one part of an individual’s or couple’s estate plan.  

Understanding the Basics: Wills vs. Trusts 

Let’s briefly distinguish between wills and trusts. A will is a legal document that outlines your wishes regarding the distribution of your assets upon your death. It becomes effective upon your passing and typically goes through the probate process, during which a court oversees the administration and distribution of your estate.  

Wills are a valuable tool to name guardians for minor children, appoint executors, and distribute assets according to your instructions. However, they may not provide extensive protection or address complex scenarios. 

A trust is a legal arrangement that allows you to transfer assets to a separate legal entity, managed by a trustee. The trustee is the person or organization that administers your assets on behalf of the beneficiaries.  

Trusts come in various forms, such as revocable living trusts, irrevocable trusts, and testamentary trusts. Unlike wills, trusts can take effect during your lifetime and continue after your death, providing greater control, flexibility, and protection for your assets. 

Asset Protection and Privacy 

One of the primary advantages of a trust is the enhanced protection it offers for your inheritance. By placing assets in a trust, you establish a separate legal entity that owns and manages those assets.  

This entity can shield the assets from potential creditors, lawsuits, or other financial liabilities that could arise during your lifetime or after your death. Trusts can provide a level of asset protection and privacy that may not be available with a simple will, which is subject to public probate proceedings. 

Avoiding Probate 

Many states require a will to be filed with probate court. Probate is the legal process that validates a will and oversees the distribution of assets. While probate serves an important purpose in ensuring the validity of a will, it can be a time-consuming and costly process. By utilizing a trust, you can potentially bypass probate altogether or streamline the process significantly. 

When a will goes through probate, it becomes a matter of public record, and the details of your estate, including its value and beneficiaries, become accessible to anyone who wishes to view them. In contrast, trusts generally remain private, preserving the confidentiality of your financial affairs and providing a more secure environment for your beneficiaries. 

Assets held in a trust can pass directly to beneficiaries according to the terms outlined in the trust document, without the need for court involvement. This can expedite the distribution of assets and considerably reduce administrative expenses compared to a probate court.  

Avoiding probate can also be particularly advantageous for individuals with complex estates because it can minimize the potential for disputes and challenges from disgruntled heirs. 

Mitigating Estate Taxes 

Another advantage of utilizing a trust is the potential to mitigate estate taxes. Estate taxes are levied on the value of an individual’s estate upon their death, which can significantly reduce the amount of inheritance passed on to beneficiaries. 

However, certain types of trusts, such as irrevocable life insurance trusts (ILITs) or charitable trusts, can help reduce estate tax liabilities by removing assets from your taxable estate or allowing for charitable contributions that provide tax benefits. 

Control and Flexibility 

As mentioned previously, a trust provides greater control and flexibility in managing the distribution of your assets. It allows you to manage your assets according to specific instructions, such as providing for the financial needs of minor children, ensuring ongoing support for a loved one with special needs, or specifying conditions for the distribution of assets over time. 

For example, one of our clients required that their children meet with a financial planner upon their death to fully understand implications of their sudden wealth before they had full access to the inheritance. 

Professional Management and Succession Planning 

Trusts offer the opportunity for professional management of your assets. The Hadary Team works with each client to manage assets in accordance with their wishes and the best interests of their beneficiaries. For those who anticipate there will be complex issues in managing their estate, we work with them to ensure their beneficiaries are willing and prepared to handle these financial matters. 

Moreover, trusts provide a mechanism for seamless succession planning. You can designate successor trustees who will assume responsibility for managing the trust in the event of your incapacity or death. This ensures continuity and a smooth transition of asset management without disruption or delay. 

Updating and Modifying Trusts 

Unlike wills, which generally require formal amendments or the creation of entirely new documents to effect changes, trusts offer greater flexibility for updates and modifications.  

Depending on the type of trust, you may have the ability to make changes throughout your lifetime, allowing you to adapt to evolving circumstances, such as changes in family dynamics, financial goals, or tax laws. This flexibility ensures that your estate plan remains relevant and aligned with your intentions. 

Seeking Professional Guidance 

An experienced estate planning attorney or financial advisor can help you understand the intricacies of trust structures, select the most appropriate type of trust for your needs, and ensure that your estate plan aligns with your specific goals and circumstances.  

If you are looking for a financial advisor that will help you plan your estate, feel free to contact our team. 



© 2023 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment adviser does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified.

Trademarks and copyrights of materials referenced herein are the property of their respective owners. Index returns reflect total return, assuming reinvestment of dividends and interest. The returns do not reflect the effect of taxes and/or fees that an investor would incur. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. An index is an unmanaged portfolio of specified securities and does not reflect any initial or ongoing expenses nor can it be invested in directly. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

Additional articles