A trust is a legal document that you and your attorney create for the benefit of your designated beneficiaries. It sets forth a fiduciary relationship between yourself (the grantor or settlor) and the person you designate to manage the trust as a trustee. You can, if you wish, designate yourself as both a beneficiary and the trustee. If you name yourself as trustee, you retain control over the assets you place in the trust, just as though you still owned them personally.
Trusts take two basic forms: revocable and irrevocable.
A revocable trust is more commonly known as a living trust. This form of trust allows you to change any of the provisions within the trust after you create it. You can even revoke it if changed circumstances make it no longer necessary.
An irrevocable trust, on the other hand, is “written in stone.” Once established, you cannot revoke it or change anything about it.
Types of Trusts
You can establish a trust for virtually any purpose you desire. Common types of trusts include the following:
- Trust: benefits your minor children
- Special needs trust: benefits your disabled child or other family member
- Charitable trust: benefits entities such as your church, alma mater or favorite charity
- Generation-skipping trust: usually for the ultimate benefit of your grandchildren in terms of asset distribution, but giving your children income that the trust assets produce during their lives
- Spendthrift trust: keeps the trust assets out of the hands of an adult child who has a gambling or substance addiction or who has demonstrated that they make poor financial decisions
- Asset protection trust: protects you and the other trust beneficiaries from creditors, court judgments and divorce
- Pet trust: benefits your favorite pet after your death
In addition to benefitting trust beneficiaries at the time and in the way you wish for them to be, trusts offer you other benefits as well. Some of the most important include the following:
- The assets you place in a trust avoid probate.
- Some types of trusts can help reduce your estate taxes.
- The trust assets and any financial dealings with regard to them remain private and confidential.
- A well-structured trust can preserve your family’s wealth and also promote important family values in your children.
- Since trusts are considerably more difficult and expensive to contest, they can reduce the conflict that may arise among family members after your death.
Probably the greatest benefit of a trust, however, is that it gives you the peace of mind that comes with knowing that you have provided for your family members and others exactly the way you want to.
Estate and Trust Administration
At AmeriEstate Legal Plan, Inc. our team of attorneys and other legal professionals have more than 20 years of experience administering estates and trusts. First, we help you create understandable trust documents, and then help your chosen successor trustee complete the fiduciary tasks you assigned to him or her.
Contact us today. We’ll be happy to answer any questions you have about trusts and start you on your way to protecting yourself and those you love by means of these highly flexible legal documents.