A trust is an important component of an estate plan. It can help protect your assets, minimize tax consequences, avoid probate—which is time consuming, expensive and public—and provide peace of mind that your wishes will be carried out. However, there are many different kinds of trusts and uses, so you’ll need to work with your attorney to determine if and which kind is right for you.
One of the most important considerations is selecting a trustee. You’ll want someone who is responsible and trustworthy. A trusted trustee should also have the experience and expertise to manage your assets and ensure they are distributed according to your wishes. Additionally, you may wish to consider a corporate trustee who will be able to offer professional oversight and unbiased management, which can help preserve family relationships while ensuring your trust is properly carried out.
Whether you have an outright or revocable trust, it is important to keep your beneficiary designations up-to-date as your needs change. In addition, you should meet with the trustee to review your trust and ensure they understand your preferences and how you want your trust assets to be distributed. You can also ask for discretionary distributions to cover unforeseen expenses, which can be helpful in preserving your wealth.
You can also use a trust to help you prepare for incapacity. In a situation where you’re unable to make financial decisions for yourself, your trustee can take on responsibility and step in to care for you. This can include providing funds for your living expenses and any necessary medical or nursing care. Trusts can also be used to provide for your children by creating a fund for their future.
A well-written trust can reduce costs and conflicts, and help your beneficiaries receive their inheritance more quickly and with less hassle. It can also be used to provide for special needs or to support charitable causes. Trusts are flexible and can be modified as your needs change, but it’s crucial to work with an experienced lawyer to ensure the trust reflects your wishes.
Trust is a complicated mental state that involves binding representations of current experiences and memories with representations of people and objects. People typically trust others without understanding exactly how their behavior might be influenced by these representations. Trust is not something that you can will yourself into having; it’s an internal state that develops through social and biological mechanisms.
Rose McDermott of Brown University notes that some researchers believe that the level of oxytocin in a person’s body can influence how much trust they have in other people. Oxytocin is the mammalian hormone that contributes to bonding, and is involved in sexual activity and childbirth. People who have higher oxytocin levels are thought to be more trusting, although she stresses that the mechanisms involved in trust are broader than simply oxytocin concentration.