Trusts are an important tool that can be used as part of an estate plan or to help manage property during the estate planner’s life. If you are considering a trust as part of your estate plan, you may have many questions about what they do and how to set one up.
Though it may seem confusing or complex, the creation of a trust is a fairly straightforward and easy-to-understand process. A trust is created when the property owner transfers legal ownership of the property to a person or institution that serves as the trustee for the trust. The trustee manages the property for the benefit of another party referred to as the beneficiary. The trustee has a fiduciary duty to look out for the best interests of the beneficiary. An important requirement of a trust is that the property must be transferred into it for it to become effective.
There are several different types of trusts based on the needs of the estate planner setting up the trust. Trusts generally fall into two categories including testamentary trusts and living trusts. Different types of trusts include a special needs trust, charitable trust or spendthrift trust to name a few. Other types of trusts may also be available to help estate planners plan their estate how they wish. Trusts can be a complimentary part of an overall estate plan or can be used in conjunction with a will and the rest of the estate planner’s estate plan.
If you have questions about setting up a trust, make sure to have them answered as you develop a comprehensive estate plan you can trust to fulfill your wishes and protect your loved ones. Estate planning tools help provide invaluable peace of mind for estate planners and their families that they should be familiar with.