There are several different aspects of a good estate plan, but a trust
is one of the most important. Establishing a trust can help you avoid
probate, and is also a great way to retain control over your assets while
you live before they are divided amongst your beneficiaries. Trusts can
be customized to fulfill your unique needs, satisfying your preferences
and working for your benefit both in life and after death. If you have
a spouse, having a will can also ensure that they are protected if something
should happen to you. If you aren’t sure if a trust is right for
you, find out why creating a trust as a part of your estate plan could
Most people establish trusts in order to pass their property or funds to
a child or other beneficiary, but they can also be used to accomplish
much more. A trust is a legal arrangement that can be established anytime
throughout a person’s life and can be used to benefit a child, sibling,
ward, or another person of your choosing. Trusts can also benefit charities
or other organizations. Trusts are managed by a third-party, the trustee,
until the person who benefits from that trust, the beneficiary, is able
to manage it on their own. For example, a grandparent might leave a trust
for their grandchild, but name the parents as the trustees until the grandchild
reaches the age of 25.
Types of Trusts
Trusts come in many shapes and sizes. First, you must decide what you want
to use your trust for, then you can choose which trust will fit the bill.
Living trusts can be handled while the settlor lives, while testamentary
trusts will only take effect after the creator of the trust has passed
away. Living trusts can be either revocable or irrevocable, which means
they can be changeable by the creator, (revocable), or completely under
the control of the trustee (irrevocable).
You might create revocable or irrevocable trusts, such as:
- Living trusts
- Life insurance trusts
- Children’s trusts
- Charitable trusts
- Special needs trusts
Benefits of a Trust
There are many reasons to establish a trust, and they can be extremely
useful tools both during life and after you’re gone.
Trusts can help you avoid probate. Probate is a nasty, expensive process that makes dividing your assets
much more troublesome on your loved ones after you’ve passed away.
Establishing a trust can help your family avoid probate because it allows
you to pass along certain assets to the trustee upon your death, avoiding
Trusts help protect your privacy. Some people believe a will is enough to establish a firm estate plan and
avoid probate. However, a will can be read aloud upon your death and is
presented during probate, whereas trusts are privately maintained by the
creator, the trustee, and the beneficiary.
Trusts can help you cut estate taxes. Estate taxes can be extremely expensive, but if you establish an irrevocable
trust you could divvy up your assets without relinquishing a huge percentage
to the government. However, this option isn’t for everyone.
Trusts are flexible. Depending on the type of trust you establish, you could still manage the
trust during your lifetime, and update it as you see fit.
If you are interested in establishing a trust to protect your estate from
probate, to save money, or for any other reason, our firm can help. Contact Law Office of Kathryn Marteeny
to get started.