Estate planning and trusts are critical to protecting your assets and the long-term financial well-being of your family long after you're retirement and have deceased. And though conventional wills serve their purpose, they're often not effective when it comes to dealing with complicated issues like step-children, grown child dependents, second marriages, charitable donations and other family situations that can make estate planning difficult.

Securing your wealth and legacy is about more than having a will that simply divides up your assets - it's about addressing specific family needs. Trusts can help you do that. To learn how, keep reading.

Trusts are for Everyone

Many people make the assumption that estate planning and trusts are the domain of the incredibly rich or people looking to lower their inheritance tax. However, in the real world, that isn't accurate.

In contrast, a trust is an amazingly flexible estate planning tool that can address a wide range of inheritance issues, including remaining IRAs. They're also for everyone - whether you make $400,000 a year or $40,000 a year.

How to Set Up a Trust

To set up a trust, you need to consult your estate planning attorney. That individual will help you prepare a trust that helps you address your particular needs and goals. You can expect to pay anywhere from roughly $1500 for a basic trust to about $5000 for a trust that's complicated or connected to a sizable estate.

Trusts for Minors

Transferring your assets to a child after you pass is typically done through a custodial account at a bank or to simply bequeath any assets in your will. Unfortunately, both of these methods give the child untethered access to the finds when they turn 18 or 21, regardless of whether he or she is ready for it.

Alternatively, a trust for minors will hold the assets for the child beyond the age of majority and can even dictate how the money is to be used. For example, many grandparents set up an education trust for their grandchildren, stipulating that the money must be used only for educational purposes.

Setting up Trusts for Dependents with Special Needs

If you are caring for a child or a dependent with special needs (mental or physical) whom you expect to outlive you, then setting up an inheritance trust should be a critical part of your estate planning. It's also important to ensure the trust is not set up as an income source as this can interfere with Social Security and Medicaid benefits.

Instead, a special-needs trust will protect your heir's eligibility for financial assistance, but continue to provide support. It will also legally protect the inheritance from potential squandering or mismanagement.

In short, estate planning and trusts can help address a number of familial issues, but don't ignore your own inevitable mortality and leave such planning until it's too late.