Trust is a vital part of any estate plan. There are many types of trusts, and each type has different benefits. In addition to preserving and protecting assets, trusts can also be beneficial for tax purposes. It’s important to work with a trusted advisor, such as an attorney or financial planner, when deciding on the right trust for your situation.
A trust is a legal document that names one or more trustees to manage the property of the trust and distribute it according to the terms of the trustor’s wishes. The trustee is a fiduciary, meaning they are required to act in the best interests of the beneficiaries of the trust. The trustor, who is the person who creates the trust, retains control of the property until death or incapacity, at which point the trustee can take over management of the asset.
While trust is a crucial aspect of any estate plan, it’s not always easy to understand. Fortunately, there are many ways to create and implement a trust that will work for your particular circumstances. The most common type of trust is the revocable trust, which allows the grantor to change the terms of the trust as needed and can be used for any purpose.
Another type of trust is the irrevocable trust, which cannot be changed once it’s created. This is often a good option if the grantor wants to protect their spouse, children or grandchildren from creditor claims and other hardships that could occur after their death. This type of trust can also be useful for people who are concerned about possible incapacity and want to ensure that their assets pass according to their wishes.
The question of when trust is warranted may seem obvious, but it is still difficult to answer. Some philosophers have argued that the reason to trust someone is what they are able to do (i.e. their ability to perform their job). Others have argued that it is the fact that they are willing to do what the trustor relies on them to do, or at least try their best to do so.
There is also a third category of theories that do not base their rationality on the actions of the trustee or what they are capable of doing, but rather on what the trustor feels they ought to be able to expect from this person. These theories share the goal of describing how trust differs from mere reliance, but they are less restrictive than motives-based theories in this respect.
It’s important to talk with an experienced estate planning attorney or financial advisor about your individual needs when creating a trust. They can help you understand the various trust options available and choose the right trust for your specific situation. In addition, they can provide professional expertise in implementing the trust and making sure it is up to date as your life changes. This includes adding new beneficiaries to the trust, as well as making sure that beneficiary designations for other assets, like retirement accounts, are up-to-date.