In general, people establish a trust for their own financial purposes or to financially protect their family members. Many different types of trusts exist that can accommodate the different reasons people need them. At the Law Office of J. Caldwell Guilds III, our trust attorney helps you figure out which trust works best for you and your needs. We then guide you through the entire process of drafting the trust to reflect your specific intentions and transferring the assets to complete the trust's creation. The Law Office of J. Caldwell Guilds III also provides trust administration and investment management services.
Schedule a Complementary Consultation to learn more about trusts and if creating one would enhance your estate plan.
Trusts as Part of an Estate Plan
A trust is a way for a property owner to pass their assets to someone else to protect and manage those assets for the benefit of another. Trusts can also be created to avoid the probate process, which is both open to public scrutiny and can be costly. The trustor, also referred to as the settlor or trust maker, is the owner of the property and transfers it into the trust and appoints the trustee. The trustee is the one who manages the property for the benefit of someone else, known as the beneficiary. The beneficiary is a person or entity for whom the trust was established.
Trusts can have multiple trustors, trustees, and beneficiaries. Typically, a different person or entity serves each of these unique roles. Sometimes, though, the trustor can act as both the trustor and trustee. Likewise, in limited situations, the trustee can act as both the trustee and the beneficiary.
As part of an estate plan, a well drafted trust can be used to minimize estate taxes, keep your financial affairs private even after death by avoiding the public probate process, and protect assets from creditors or help beneficiaries who cannot manage money well. Whatever your need is for a trust, our estate planning lawyer can help make sure your trust is drafted in a way that benefits you and the intended beneficiaries.
Types of Trusts
Specific types of trusts that people can use to protect their assets or pass their property on to someone else come in many forms. However, all of these trusts are either revocable or irrevocable.
Revocable trusts, also known as living trusts, allow the trustor to continue to alter the property in the trust. They can even revoke the trust entirely. This gives the trustor far more control over their property. With that control, though, comes a downside: because the trustor still has access to the property in the trust they created, their creditors can often reach into the trust to satisfy debts owed to them.
Irrevocable trusts, on the other hand, cannot be changed or revoked once the trustor creates one. The trustor relinquishes control over the assets in the trust. Creditors cannot touch those assets once they are removed from your estate. Often, the trustor gains in terms of lowering potential estate tax and avoiding the public probate process.
Examples of Different Types of Trusts
Just to give you an idea of what types of trusts there are to address your specific needs, here's a list of some of the most common.
- Asset protection trust
- Charitable trust
- Special needs trust
- Spendthrift trust
- Tax by-pass trust
- Qualified personal residence trust
You can also create a trust specifically for your pets, farmland, and even your gun collection.
Benefits of a Trust
As mentioned, trusts are beneficial to avoid probate and minimizes taxes. By using a trust (in addition to a will or in lieu of a will), assets of a trust pass directly to the trust's beneficiary when the trustor dies. This process means the assets do not go into the trustor's estate – they are transferred inter vivos, or between living people. As a result, certain estate taxes do not apply to trusts. Using a trust to pass property to your heirs can have tax advantages and can avoid the potential legal complications of dividing your estate or a contested will.
A trust also gives you the ability to create instructions and conditions for asset distribution upon your death–giving you control over your assets even when you are not here. So, if you have a beneficiary whom you want to finish college before disbursement of funds or if you want only a certain amount of funds disbursed at different times in the beneficiary's life, you get to decide those things. Further, you can identify a successor trustee––someone you know who can manage the trust according to the terms and conditions.
Contact a Trusts Attorney Today
Whether you have a few or a lot of assets, a trust may be what you need to manage those assets and to decide what's done with them upon your death. Our trusts lawyer will consider what you want the trust to do for you, review the assets you want to transfer to the trust, and guide you through the entire process, providing solid legal advice and counsel to assure your integrated estate plan reflects your intentions for your legacy.
To learn more about trusts and how a specific one can benefit you, Schedule a Complementary Consultation with the Law Office of J. Caldwell Guilds III today by using the button below.