Trusts

Generally, a trust is a right in property (real or personal) which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust.

After the death of the trust creator, a settlement of the trust is necessary to comply with IRS regulations, state law, and the terms of the trust.

Trusts eliminate problems that traditional wills carry because it becomes effective immediately and can direct a client’s wishes at disability/death. A properly prepared and funded trust will provide multiple functions within one document.

And, there are many types of trusts.

A living trust is written agreement that relates how the property of the creator is to be distributed during their life time, including any disability, and after their death.  Living trusts can be designed to provide beneficiaries with creditor, divorce, and IRS protection.

Revocable trust, as an estate planning device, can control, transfer, or gift to one or more beneficiaries from its living trustor. Not a way to stave off creditors.

An irrevocable trust allows the creator, called a grantor, a way to ensure that his or her possessions and insurance policies are distributed in a desired manner after his or her death. The grantor legally gives up ownership on all of the items placed into the trust, the trust cannot be changed.  This is most often done to reduce the creators taxable estate while ensuring the property of the trust is distributed to the intended beneficiaries.  This type of trust can also serve as a tool to protect assets in the trust.