subject: Why Would I Need A Trust? [print this page] --------------------- ---------------------
A trust is a valuable estate planning tool, but many dont realize how their estate can benefit by creating a trust.
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A trust can be a valuable estate planning tool in many situations, but many do not know exactly how creating a trust may benefit their estate. First, creating a trust involves several people:
A settlor: The person who has the trust created;
A trustee: A person or business that manages the trust property for the benefit of the beneficiary.
A beneficiary: The person named within the trust documents that will benefit from the trust.
A trust is simply a legal arrangement in which the settlor transfers ownership of property to the trust, the named trustee then manages and controls the assets for the benefit of the named beneficiary. A living trust is simply a trust that is created while the settlor is still living, and in that case, they may also be the trustee as well as the beneficiary until a triggering event, such as their incapacitation or death, when named successors take over. This allows a living trust to also act as a mechanism for managing finances in the event you can no longer manage them on your own.
Assets that can be transferred and owned by a trust include real estate, stocks, bonds, valuable personal property and businesses. When an asset is transferred to the ownership of the trust, it can provide benefits to an estate including:
Protecting assets;
Allowing property to avoid probate;
Reducing or eliminating estate taxes;
Setting limits and conditions on the use of the property.
Working with an estate planning attorney or trust attorney ensures that creating a trust is right for your estate. They can advise you on the estate planning tools that will meet the needs and goals of your family, while taking into account current estate tax law and other variables.
