• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Overland Park Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s FAQs
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
      • Overland Park Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Edmond
    • Midwest City
    • Moore
    • Norman
    • Oklahoma City
    • Owasso
    • Yukon
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Estate Planning » When Is a Trust Preferable to a Will?

When Is a Trust Preferable to a Will?

December 16, 2021 by Larry Parman, Attorney at Law

There are some commonly held misconceptions about trusts. Many believe trusts are only for the wealthy, and wills are for everyone else.  nursing home asset protection

It’s true that some trusts are designed for wealthy individuals that have estate tax concerns.  However, there are other trusts that are useful for people that are not among the financial elite.

In this post, we look at some of the circumstances that call for the use of a trust instead of a will.

Spendthrift Protections

Unless you include a testamentary trust within a will, the heirs receive lump sums with no safeguards or asset protection.

This can be a concern if your beneficiary is not good with money.  The beneficiary could burn through his inheritance too quickly and run into financial difficulties.

A revocable living trust can address this situation.  Under such a trust, you act as the trustee while you are living, maintaining control of the assets.

In the trust, you name someone to act as the trustee after you pass away. When that time arrives, the trust becomes irrevocable, and the beneficiary would have no direct access to the principal.

These terms also protect the assets from the beneficiary’s creditors. With regard to careless spending, you can set limits on the distributions. For example, you can instruct the trustee to distribute a certain amount each month until the beneficiary reaches a certain age.

Special Needs Planning

A significant percentage of people with disabilities rely on state programs.  For example, Medicaid may provide health insurance, and Supplemental Security Income (SSI) provides a modest income.  These programs are need-based, so a person with significant assets in his name cannot qualify.

Once eligibility for these benefits is established, it is not necessarily permanent. If a beneficiary receives money, she could lose her benefits.  This applies to an inheritance received through a will.

To protect a special-needs beneficiary, you could establish a supplemental needs trust. The special-needs beneficiary would not control her inheritance, but your trustee could use the resources to make her more comfortable.

Medicaid eligibility remains intact if the guidelines are followed correctly. After the death of the special-needs beneficiary, an alternative beneficiary may be named to inherit the remaining assets.

Inheritance Protections Upon Remarriage

Let’s say you are financially successful and you are getting remarried relatively late in your life. Your spouse is younger than you are, and you have children from a previous marriage.

If you leave everything to your spouse in a will, you may unintentionally disinherit your children. Under these circumstances, you can protect their inheritances if you establish a qualified terminable interest property (QTIP) trust.

Assuming you die first, the trustee you designate would distribute the trust’s earnings to your spouse for the rest of her life.  Your spouse would also be able to use property owned by the trust.

The children would be successor beneficiaries, and the surviving spouse would have no ability to change the terms. After the spouse’s death, the children would inherit the assets in the qualified terminable interest property trust.

We Are Here to Help!

Our doors are open if you are ready to work with an Oklahoma City estate planning lawyer to put a plan in place. Personalized attention is the key to a properly constructed plan, and this is exactly what you will receive when you choose our firm.

You can schedule a consultation appointment if you call us at 405-843-6100, and you can use our contact form to send us a message.

  • Author
  • Recent Posts
Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
Latest posts by Larry Parman, Attorney at Law (see all)
  • The Pros and Cons of Long-Term Care Insurance - March 16, 2023
  • What Does HIPAA Stand For and Why Should I Care? - March 14, 2023
  • Is Charitable Giving Part of Your Estate Plan? - March 9, 2023

Filed Under: Estate Planning Tagged With: inheritance protection, special needs planning, spendthrift protection planning

Other Articles You May Find Useful

HIPAA
What Does HIPAA Stand For and Why Should I Care?
charitable giving
Is Charitable Giving Part of Your Estate Plan?
The View from Heckerling
guardian selection
How Do I Select a Legal Guardian for My Children?
Uniform Probate Code
Does Oklahoma Use the Uniform Probate Code
estate contest
How Can an Estate Be Contested?

Primary Sidebar

Parman & Easterday, LLP

DOWNLOAD OUR FREE ESTATE PLANNING CHECKLIST

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place Suite 312
Tulsa, OK 74133
United States (US)
Phone: (405) 843-6100

MAP

parman_sidbr_map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 12:00 PM

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube