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How To Use A Trust Effectively

by Clea Smith 12 months ago in how to

A trust can be used effectively as an instrument to avoid probate and save taxes when estate planning.

A trust can be used effectively as an instrument to avoid probate and save taxes when estate planning.

It’s usually a good idea to have a trust in place if you have beneficiaries that you want to receive your assets.

A trust helps them avoid probate court and keeps your assets private.

Additionally, it’s also a good idea to have a trust in place if you have young children, special needs family members, or children who are not capable of handling and managing the assets on their own.

A Trust Attorney can be very useful when you want to create a trust to protect your loved ones.

How A Trust Works

The person who creates the trust is known as the grantor or settlor. They fund the trust by transferring some or all of their property in to the trust.

While they are alive, they then act as the trustee and manage all of the assets in the trust.

Once the grantor dies, a successor trustee takes over the management and distribution of the assets in the trust.

A trust is governed by the terms under which it was created. In most states, this requires a contractual trust agreement or deed.

It is possible for an individual to assume the role of more than one of these parties, and for multiple individuals to share a single role.

For example, in a living trust the grantor can also be the trustee. Will, trust, and estate law is complex and drafting a trust can be difficult.

If you are looking to create a trust, it is usually best to consult with a trust attorney to ensure that you are preparing the proper kind of trust that is legally binding.

A Person, Business Or Public Body – As A Trustee

While the trustee is given legal authority to manage the trust, the trustee owes a number of fiduciary duties to the beneficiaries.

The period of time for which a trust is to operate is usually expressly prescribed in the trust instrument.

If the duration of a trust is not clearly fixed, the basic rule is that a trust will last no longer than necessary for the accomplishment of its purpose.

When all the beneficiaries and the settlor join in applying to the court to have the trust terminated, it will be ended even though the purposes that the settlor originally contemplated have not been accomplished.

If the settlor does not join in the action, and if one or more of the purposes of the trust can still be attained by continuing the trust, the majority of U.S. courts refuse to grant a decree of termination.

Benefits Of A Trust In Estate Planning

A trust is beneficial for creators and beneficiaries alike. You may choose to create a trust if:

• You want to pass on assets without going through probate (which is required for wills)

• You want to create a plan for managing personal or business assets if you become incapacitated

• You want to keep aside assets to care for a dependent who has special needs

• You want to establish rules or requirements that beneficiaries must meet to receive their inheritance

• You want to keep assets for the care of minor children in the event that you pass away or become incapacitated

• You want to reduce possible estate and gift taxes

Why Do We Really Need A Trust Attorney?

A attorney by virtue of his training, qualifications and experience can save you from lot of hassles in the future by ensuring that it is drafted properly and is legally binding.

After your trust is drafted with all of the pertinent information, you should sign it in front of a notary. To make it effective, use a deed or standard transfer document to transfer the property of the trust into the trustee's name.

The drafting and funding of a trust is a very complex process, which is why hiring an attorney is advisable. A lawyer will be of great help as they are trained and qualified in this field.

Transfer your money, property, and assets to your loved ones in the most efficient way possible so you know your family is taken care of after you pass away

If you are interested in getting a trust drafted, call Rochester law center to schedule an initial consultation with a estate planning attorney.

we are here to help you We've helped 1,000s of clients all matters of estate planning. Call us today to schedule your initial consultation at (248) 613-0007.

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Clea Smith

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