Trusts are a legal structure in which you place assets into a separate entity and designate who will manage those assets during your lifetime, after your death, or if you become incapacitated. You name yourself as the grantor (the person who funds the trust), a trustee (the person who manages it) and a beneficiary (who can receive payouts from the trust).
The benefits of a trust include control over your wealth, protection of your legacy, and an efficient and less expensive estate planning process. People use trusts for many different reasons, from avoiding probate to protecting the interests of minors until they are adults.
Creating a trust may require a bit of legwork and the help of an attorney, but it can be a worthwhile investment in the long run. Talk to a lawyer who specializes in creating trusts about your specific situation and needs so you can make sure a trust is the right tool for your goals.
Revocable living trusts are one type of trust that can give you a lot of power over the management of your assets during your lifetime. This is because you can transfer your title to your assets into the name of your trust and retitle them as “trust assets,” which means that they belong to the trust and not you as an individual.
It can also help to avoid a court-appointed conservatorship if you are unable to manage your own affairs due to an illness or injury that leaves you incapacitated. You can also revoke your trust, which will allow you to take control of the assets in your name again if necessary.
In addition, revocable living trusts can be a good way to minimize the amount of estate tax your beneficiaries will pay. This can be important if your estate is large enough to owe federal or state estate taxes.
You should also think about how you want to distribute your property. You can leave items, such as art, to a particular child or heir; you can give them a certain monetary amount, or you can donate the entire collection to a museum or charity.
The exact details of how you want to distribute your estate will depend on a number of factors, including your financial circumstances and family dynamics. It is a good idea to discuss the details of your trust with your spouse, children and other potential beneficiaries early on so they will have a clear understanding of what’s in the trust.
When you are creating your trust, it’s a good idea to name a trustee that you can trust. This will ensure that your trustee will be able to carry out your wishes and protect the trust from any conflicts between the beneficiaries.
Choosing the right trustee is crucial, as they will be responsible for distributing the trust’s assets to your heirs. They will need to have the experience and expertise needed to oversee the trust and be able to communicate with your beneficiaries about their rights and responsibilities under the trust.