Trusts should be an important part of planning anyone’s estate. There are many benefits in using trusts as part of your estate plan. For example, trusts can make it possible for you to avoid the probate process, which can be both lengthy and expensive for your beneficiaries.
Trusts can mean that you are able to get peace of mind with the knowledge that the assets you own are in a safe place, and will be distributed easily and quickly to your beneficiaries after your death.
How is a trust created?
A trust can be created by transferring legal ownership to a trustee. This trustee will manage the property on your behalf, and they will transfer the property over to the trustee on your behalf after the event of your death.
What is the difference between testamentary and living trusts?
Testamentary trusts are a type of trust that only come into effect after the death of the grantor. This means that during the lifetime of the grantor, the assets in the trust are not accessible to anyone else. A testamentary trust is very flexible and allows the grantor to set certain parameters. For example, the grantor could say that his or her beneficiary will not inherit any assets until his or her 25th birthday.
A living trust on the other hand can be changed by the grantor at any time, and continues as a trust after the grantor’s death. It is also very useful in order to avoid probate.
If you are considering setting up a trust, it is important to consider in detail the legacy that you want to leave behind.
Source: FindLaw, “Trusts: An Overview,” accessed March 15, 2018