A trust is a legal arrangement that lets you manage and distribute your assets according to specific instructions. It can protect your property from the claims of creditors and avoid probate, allowing for a faster, more private transfer. Trusts can also minimize taxes for beneficiaries. If you are considering establishing a trust, consult with an estate planning attorney to ensure that your goals are met.

While there is little agreement in philosophy about when trust is warranted, most philosophers do offer a list of relevant factors that someone might consider in deciding whether or not to trust someone. These factors might include a person’s social role, their domain, and the competency and willingness they tend to exhibit (Jones 1996). In other words, a person should be competent and willing to do what you expect of them before you will trust them.

In many cases, a trustee is someone who has been designated by you to oversee your financial affairs. They are usually a professional, like an accountant or a lawyer. In addition to a thorough understanding of trusts and the legal process, a trustee must be able to understand your specific circumstances and the goals of your trust.

Trustee duties often involve providing a formal accounting to beneficiaries each year. Beneficiaries may also request reasonable financial information from trustees at any time. In these situations, it is important for trustees to keep records and documents in a way that can be easily retrieved if needed. Using accounting software and keeping organized filing systems can help trustees streamline their duties and make them easier to complete.

Trustees are required to report on their investment activities and distribute income and principal to beneficiaries in accordance with the trust’s terms. Depending on the type of trust, it may be necessary to pay taxes on trust income and capital gains. Generally, trusts that are established for the benefit of family members may be subject to federal gift and estate tax.

Trusts are commonly employed to protect your assets from the creditor claims of your spouse, children and other relatives. They can also be used to safeguard valuable collections, such as art, coins or stamps that have taken years to build and could be sold or lost to unwarranted claims.

In many cases, a trust can be created for a specific purpose, such as to fund your grandchildren’s education or to provide assistance with the start-up of a business. Other trusts are designed to be flexible and adaptable to your changing circumstances. If you create a revocable trust, you can change the terms at any time by executing an amendment to your trust document. This will let you react quickly to any changes in your situation, such as a new child or a move to a different state. This flexibility can save your loved ones the burden of having to work through an estate dispute to determine your wishes. It can also keep your family from having to go through the costly, drawn-out probate process.