What is a Trust?
Finder Law Serves Clients Across Jefferson City, Columbia, and Central Missouri
There can be many questions regarding the best way to ensure your assets are passed to your loved ones according to your wishes once you’ve passed away. You might think that only wealthy people need a trust, but that simply isn’t true. A trust is the best way to ensure that your assets pass to whom you want without long court delays and costs.
So, What is a Trust?
It’s a legal document that creates a relationship between three separate parties. The first is the trust itself, which is the legal entity that owns all the assets in the trust. The second is the trustee, who is the person who makes all the decisions regarding the trust and its assets. Finally, the beneficiaries are the people who receive assets from the trust.
If you create a trust during your lifetime, the trust documents will refer to you as the grantor. While you’re alive, everything that’s owned by the trust is in your control. However, when you pass away, the trust will ensure that all the assets owned by the trust get passed to the beneficiaries that you choose through the role of the trustee. One of the biggest reasons to use a trust rather than a will is that a trust will allow your beneficiaries to avoid probate. Probate is a court process that is both lengthy and costly, but a trust will allow these assets to be distributed quicker and more cost-effectively.
Assets Within Your Trust
When creating a trust, your attorney will have you specify all your assets and who you want to receive them. All those assets can then be transferred from the person’s ownership to the trust’s ownership; although this step is not always required. As grantor, you will still own those assets because you are the person with legal control of the trust. It will also set up decision makers that might be needed to make end-of-life decisions for you, as well as a person to ensure the assets in the trust are distributed according to your wishes.
Trusts clearly state your wishes and have several benefits compared to a will.
- You will avoid probate.
- If you were to become incapacitated for any reason, the trustee can immediately have access to your assets in case decisions must be made on your behalf.
- It can help reduce estate or income taxes, keeping more of your money in the possession of your beneficiaries.
- Trusts create a plan for any minor children in your care to make sure that in the event of your passing, they are placed with the person(s) of your choosing.
- Privacy is a benefit to a trust because all public records show assets as owned by the trust rather than a particular person or persons.
- Trusts can protect assets from being taken.
- They can include language for funds to be donated to a charity or charities of your choice, or even making a large grant to a specific organization.
You don’t want to leave the assets you’ve worked so hard to possess in limbo in the event of your passing.
An experienced estate planning attorney, like Daniel Finder at Finder Law, can help create a trust that meets all your goals and needs. Every situation is different so every trust will be unique as well. Daniel Finder has over a decade of experience in estate planning & can help create the trust that’s right for you. Call us today to set up a consultation.
