What is a trust?
A trust is often used as a will substitute. It is an estate planning tool and when used in the right situation it can work very well. A trust is a written agreement whereby the person creating the trust (i.e. “settlor”) designates a party (i.e.” trustee”) to receive assets and to manage them pursuant to written instructions for designated beneficiaries. A trust can continue beyond the death of the settlor of the trust. A trust has to be funded by transferring assets to the trustee. The trustee will hold the assets for the designated beneficiaries. During the settlor’s lifetime, the beneficiary is often the settlor and the settlor’s spouse. After the death of the settlor, the written agreement will usually instruct when and how the assets are to be distributed. Sometimes the assets are distributed outright to the designated beneficiaries.and other times some or all of the assets will continue in trust until some date or specified event in the future. A trust usually costs more than a wi
A trust is a written expression of your estate planning wishes expressed in a contract form. A trust can be set up during your lifetime or it can be created upon your death. It is a private document and property held in the trust does not need the process of probate to establish legal ownership of the asset. Advanced planning techniques allow for the creation of trusts during your lifetime that are designed to make gifts of property, preserve wealth or otherwise control the ownership or disposition of your property. Basically, trusts are designed to provide flexibility and privacy. They are often designed to save taxes and protect assets from the claims of potential creditors. You decide how much control you (or your heirs) will have over your property and for how long. Various types of trusts are described in other FAQs.
. A Trust is a separate legal entity which is created with a written agreement between the grantor (the personal creating the Trust) and the Trustee (the person who will manage the Trust). Assets from the grantor’s estate are transferred into the ownership of the Trust and the Trustee is charged with prudently investing and distributing those assets according to the terms of the Trust Agreement. The Trust Agreement will commonly have provisions for management during the grantor’s life, during his or her incapacity and following his or her death. The most commonly cited reason for selecting a Revocable Living Trust over a Will is avoidance of a probate.
