As we age, our circumstances change. Taking the time to ensure your long-term care and financial plans reflect your shifting needs is simply one of the responsibilities of getting older. Many Americans wonder: Is there a trust I should be using now that I’m nearing my golden years?

The truth is, a trust that works for one individual may be completely wrong for another. The decision of whether to create a trust, and which trust to choose, depends on a combination of factors unique to each person’s life. However, there are certain situations where it often makes sense to consider a trust. Here are three common examples.

For Medicaid planning purposes

How will I pay for medical care? It’s a question aging Americans struggle with. One poll found healthcare costs are a major source of anxiety for many Americans over the age of 65.

Medicaid can be a solution, but securing Medicaid coverage is not automatic. You have to adhere to the public program’s strict income and asset limits. One way to do so is through strategic use of trusts.

By putting ownership of certain assets into a trust (which is then controlled by a trustee), it’s possible to ensure you meet Medicaid eligibility requirements without having to worry about a rushed and potentially problematic spend-down. However, using a trust effectively as part of Medicaid planning needs to be done well ahead of time. The earlier you start to explore this option, the better.

For financial protection

Creditors and tax collectors are always looking for ways to get more money from people, particularly aging individuals who may have important savings. Certain trusts can be used as part of a broader asset protection strategy.

When done correctly, this type of trust can safeguard you and potentially beneficiaries from these types of claims. Keep in mind, this may involve the use of an irrevocable trust, which cannot be undone once finalized. Make sure you are fully aware of and comfortable with the effects before signing anything.

For a lasting legacy

For many people, it’s important to leave a legacy that loved ones will be proud of. It is often possible to create trusts that help preserve a legacy by minimizing tax obligations and avoiding the court-supervised probate process.

This helps ensure the belongings you worked hard to acquire end up with the right person. A trust may also reduce the potential for family conflict. Clear direction means there is little room for disagreement.

A trust is a useful tool. But it must be created in the right way, at the right time and for the right situation.