Do You Need A Trust?

Many clients come to us because they have heard they should have a trust. The usual reason for this is to avoid probate. Although trusts can accomplish the purpose of avoiding probate, if this is the only purpose to be served by establishing the trust, then in New Mexico, it is not that important.

Probate is the process of transferring a deceased person’s assets to the beneficiaries designated in the deceased person’s Will or to his or her statutory heirs if there isn’t a Will. It is initiated through the probate court or district court in the county where the deceased person was living at the time of his or her death, and in any county where the deceased person owned real estate at the time of his or her death, if different. Unlike other states around the country, probate in New Mexico is not overly complicated or expensive. For that reason, it is not something that people should fear or base all of their planning around.

Trusts can be established during your life, or can be established at death as part of your Will. To avoid probate, you would establish a trust during your life so that the trust would govern your assets at the time of your death, rather than requiring probate. One reason you may want to set up a trust during your life would be for administrative ease if you own property in more than one county or state. Doing so would avoid having to open probate in multiple counties or states, which could be cumbersome.

Here are a few additional reasons why you might want to set up a trust during your life or as part of your Will:

  • You want or need ongoing management of your assets after your death: this is important if your intended beneficiaries are under age 18, are disabled, or would otherwise need assistance or oversight with managing assets.
  • You want to provide for someone during their lifetime, but then want any remaining assets to go to your desired recipient: this is a common situation with blended families, where spouses want to provide for each other, but ultimately want their share of the remaining assets to go to their own children.
  • Tax planning: there are different tax strategies, too lengthy to be described here, that can be accomplished with trusts.

If any of these situation apply to you, then a trust may be the right solution for you. Contact an estate planning attorney or one of our attorneys from Pregenzer, Baysinger, Wideman & Sale.