A trust is a legal document used in estate planning to pass assets at your death without the cost and delay of probate court. Trusts are composed of four elements:
- Grantor: The grantor is the person setting up the trust
- Trustee: This person administers the trust. Frequently the grantor is also the trustee, with successor trustees named to manage the trust after the grantors’ passing.
- Assets: The property, accounts, money and other physical property that give the value to the trust.
- Beneficiaries: The people or organizations that will receive assets from the trust when you die.
Trusts are commonly used to pass on business assets that require management that would be tied up if the asset was subject to the control of the probate court. Additionally an estate with holdings in multiple states can utilize a trust to avoid the expense and travel involved in multiple probate proceedings.
Surviving spouses can receive the assets in trust and be granted control over the trust.
Trusts can be established to provide for the care of special needs individuals. They are also used when passing assets to an heir you feel lacks the capacity or responsibility to handle the assets in the estate.
Charitable trusts, just as the name suggests, allows for your assets to pass to the charities of your choice. An example would be the establishment of a local high school scholarship fund. Charitable trusts are one of the few that accord the originator tax benefits.
Setting up a trust is more complex than a will, and somewhat costlier. That being said the additional flexibility, along with the added assurance that your estate will be settled in accordance to your wishes, make trusts an estate planning tool worthy of examination.
The attorneys of Ford + Bergner LLP specialize in estate planning, as well as putting your mind at ease that your final wishes will be respected and that your heirs’ futures will be protected after you are gone.