Ask yourself, `Why do I need a trust?'

With the latest changes in the estate tax being six months old, we are often asked why we still recommend trusts as part of our estate plans.

Many people think of trusts as complicating things. In the idyllic "I love you" will where everything is given outright to the surviving spouse or, if none, to the children, or if you hold title to your house and your investment and bank accounts in joint names with your spouse, there is little thought to what happens in the years that follow.

We often imagine a world where our spouse lives out the rest of his or her days watching the children and grandchildren grow up while spending every night alone.

We never forget a loved spouse, but people move on and often enough find themselves finding companionship with another.

Remarriage creates problems with outright gifts and survivor accounts with your spouse.

"I love you" wills and joint accounts do not work with blended families. Where each spouse -- and this applies for any second marriage -- has children from a previous marriage and gives everything in his or her will to the second spouse, or has all of their accounts in joint names, the survivor will give everything to his or her children and leave nothing to the step-children (your children).

This means, despite your best intentions, your children from a first marriage will receive nothing.

You could leave your spouse with only part of your estate and give the remainder to your children, but it is hard to guess how to split your estate without leaving your spouse destitute.

Leaving a gift outright to your children also exposes your legacy to your children's creditors, such as their spouse in a divorce, or credit card companies and banks in a foreclosure.

The solution then, is to use a trust to hold your estate for your spouse's benefit, and when your spouse passes at a later date, to distribute the balance to your children. This requires you to keep separate accounts. You can still give your spouse access through a "power of attorney" designation on the account.

The other problem with joint accounts or outright gifts to your spouse in your will is the unpleasant truth that, as we age, our health care costs increase.

Many elderly Americans only have Medicare for their health care needs; however, Medicare will only pay for up to 100 days of health care per instance.

If you or your spouse require long-term care to treat a medical condition, you will either need long-term care insurance, private pay, or Medicaid.

Medicaid will only provide long-term care when your assets, excluding certain assets such as your home while you live there, are reduced to $1,600 for single individuals.

Until that time, your surviving spouse will have to spend all of your life savings on his or her care.

If you gave your entire estate to your spouse outright in your will or, if you hold your accounts in joint names, this means your children may inherit nothing.

If, however, you placed your estate in trust under your will for your spouse's supplemental needs, everything except the statutory one-third of the income from your assets will be protected.

The trust would provide for the things Medicaid does not cover and, after your spouse passes, the remainder can be distributed to your children.

Finally, for individuals of significant means, trusts still provide a means to maximize the amount of your estate that can pass tax-free to your children.

With a properly drafted trust, you and your spouse may together pass up to $4 million tax-free for Connecticut estate taxes and up to $10,500,000 tax-free for federal estate tax purposes.

As always, you should consult the advice of an estate planning attorney to properly draft any of these types of trusts in your will.

Arthur C. Weinshank, Dolores R. Schiesel and Peter J. Harrison are attorneys at Cramer & Anderson, which has offices in Litchfield County.