Indiana parents who are creating trusts for their children in which they name one of them as trustee may want to also appoint a protector. This is someone, often a sibling, who can step in and take over the trust if there is a threat, such as a lawsuit.
A trust can also protect assets from a spouse in case of divorce or from a stepparent in case of death. Assets that are not placed in a trust for children could otherwise pass to the stepparent and the stepparent’s own children. People may also want to think about how they will protect their estate from estate tax. The approximately $11 million exemption means that at present this is a concern for few people, but in 2026, it is due to drop to around $5 million, and it could go significantly lower. With a dynasty trust, wealth can be protected from gift and estate tax for several generations.
There are a number of other types of trusts that people may find useful. The asset protection trust places asset control with an outside trustee, but it offers a great deal of protection. Couples who want more control may want to consider a spousal lifetime access trust. This offers less protection than an asset protection trust but does remove assets from the taxable estate.
Estate planning can be a complex process, and working with an attorney may help people avoid pitfalls that can make the estate more vulnerable to challenges by family members. An attorney may be able to explain how various types of trusts can be useful in certain situations. For example, if a parent is worried about an adult child being irresponsible with assets, a trust could be set up with a trustee who determines when the child receives distributions.