Thoughts On Setting Up A Family Trust
If you are doing some estate planning, you might consider setting up a family trust. This is one of the most flexible tools a person has to determine how their estate will be managed and distributed. There are many types of trusts and they may be used to help protect assets, control the distribution of estate assets and for tax planning purposes. The best type of trust for your situation will depend on several factors. However, you must talk to a family trust lawyer first.
There are several benefits to establishing a trust. To begin, a trust is a written agreement. This document details how the property will be held in trust for the beneficiaries. Trusts are established to reduce or eliminate estate taxes, protect the estate’s assets, and prevent probate. The trust is where an owner can store their property and even give it a new name. Before you begin any planning see a North Shore family trust lawyer.
The person initiating the trust is known as the trustor, settlor or grantor. The individual who takes over and administers the trust is the trustee. Those who will receive assets from the trust are called beneficiaries. It is possible for one person to be all three, but most of the time, these are different people. If the trust is a revocable trust, it is eligible for certain tax incentives.
There are two types of trusts: revocable and irrevocable. They are just as they sound. If assets are put into an irrevocable trust, they may not be taken back. In a revocable trust, the grantor may change their mind and take back their property.
The trust most commonly used is the living revocable trust. This type of trust has a number of benefits. It may be used to avoid probate or reduce estate taxes. It can also provide continuity if the property owner dies or becomes incapacitated. The trustee oversees the trust and steps in when the property owner can no longer make decisions about the assets of the trust.
Revocable trusts are often called a Family Trust or a Loving Trust. These trusts all work the same way as long as they are created properly. It is important to ensure the attorney used understands exactly what is necessary to create a revocable living trust. It is also a good idea that the grantor has a general knowledge of how these trusts work so they can ensure it will meet their requirements.
The grantor also needs to know how to best use the trust so the property is protected from probate. The grantor can take several steps to ensure their trust is secure. Even though the trust requires property be transferred, with a revocable living trust, it can always be transferred back to the grantor, if necessary. It is also possible that the grantor or grantors be appointed as the trustees. This means that for most activities, having property in a trust will be transparent. All assets of the estate are owned by the trust, not by individuals, but this set up helps avoid estate taxes and probate, both of which have the potential to severely reduce an estate’s value.
Setting up a revocable living trust is not hard, but it should be done with the advice and help of an estate lawyer. Creating a revocable living trust can help the estate avoid probate and estate taxes.