A trust is a legal vehicle that allows you to avoid probate, pass on wealth more efficiently and ensure your wishes are carried out in the event of your death. A trust can also minimize taxes and protect assets, making it an important planning tool for people of all income levels. Working with an attorney or a financial advisor, you can craft a trust that meets your individual needs and goals.

To set up a trust, you need to choose a trustee to manage and distribute the assets in accordance with your instructions. The trustee can be a person, such as yourself or a family member, or a firm such as a bank trust department. A corporate trustee can provide unbiased management and specialized expertise, which may help preserve family relationships and protect your interests. The trustee must be someone who is responsible and trustworthy and has the knowledge, experience and resources to carry out your plans.

After a trustee is chosen, you need to fund the trust. This involves transferring assets into the trust, such as real property, investment portfolios, bank accounts, closely held business interests and life insurance policies. It is important to keep a list of all assets that are being transferred into the trust to keep track of them and their value. You should also select a successor or disability trustee to take over management of the trust in case you become incapacitated or die before your beneficiaries are able.

A key benefit of a trust is that it can avoid probate, which can be costly and time-consuming. By avoiding probate, your trustee can get to work managing and distributing assets quickly and efficiently. This can save money, speed up the process and maintain privacy, as probate is a public process.

Another benefit of a trust is that it can help to protect your assets from creditors or lawsuits. A well-drafted trust can shield your family members from losing their inheritances to bankruptcy, divorce, a lawsuit or even a spouse or child’s debt.

Finally, a trust can be used to provide support for disabled beneficiaries, such as children with special needs or elderly relatives who need help managing their finances. A trust can provide a steady stream of income to support them, rather than giving them all of their inheritance at once.

Rose McDermott, an associate professor of psychology at Brown University, suggests that trust has a biological component that is determined by the level of oxytocin in your body. Oxytocin is a hormone that plays a role in social bonding and other biological functions, such as contraction of the uterus muscles and lactation.

A trust can be an excellent way to manage your assets and ensure that your wishes are carried out in the event of a unforeseen emergency or death. A knowledgeable estate planning attorney can help you create a trust that works for your situation, in conjunction with your tax and financial advisors.