What Is a Trust?


A trust is a legal arrangement in which property is placed in the hands of another person, called a trustee, and is managed on behalf of beneficiaries. It can be a useful tool for estate planning, especially for people who want to leave assets to their children or other family members in a specific manner.

The most common purpose of a trust is to protect property from creditors or others who may have a claim on the owner’s assets after death. In addition, a trust can help keep assets from being spent or sold by family members who may have poor intentions.

There are many other benefits to a trust, too. For example, you can put a child’s education in the hands of a trust, so the money will be used to support them until they are older and ready for college. In addition, you can put a charitable cause into a trust, so your money will benefit that organization in the future.

Creating a trust can be a complicated process, and it’s a good idea to hire a financial professional to guide you through the process. There are services like Zoe Financial and Harness Wealth that connect you with a qualified financial advisor to walk you through the steps of establishing a trust.

Trusts are a popular estate planning tool that can simplify the process of distributing your assets and leaving behind a legacy you can be proud of. They can also minimize conflict between heirs, and they are easy to update as your circumstances change.

A trust can also protect your assets from the taxman after you die. A trust can remove your property from the reach of Inheritance Tax, and some trusts are subject to their own tax regime, which can be helpful for families with high wealth.

You can also use a trust to save on estate settlement costs, which can be very expensive. A trust can pass your property to your children directly, so it will only be liable for estate settlement costs once instead of twice.

There are several types of trusts, and you’ll want to find one that suits your needs. Some are simple and inexpensive to set up, while others require a lot of complicated financial planning. You’ll need to work with a qualified attorney to create the best plan for you and your family.

Some people are reluctant to create a trust because they think they don’t have enough assets to justify it. But trusts can be a great estate planning tool for anyone, regardless of your income level.

When creating a trust, you’ll need to decide how much money you want to invest in it and who will manage the money. You’ll also need to decide who will be your beneficiaries.

Your beneficiaries can be your children, other relatives or a charity or school. You can even designate an asset to go to the trust as a gift.

You can also set up a revocable trust, which allows you to change the terms of the trust at any time. This makes it easier to adapt your plans as life changes, for instance, if you get married or have children.