Answer: A trust is a fiduciary arrangement that allows a third party (a trustee) to hold assets on behalf of a beneficiaries.
Benefits of trusts include:
- Control of your assets.
- Protection of your assets.
- Privacy and probate avoidance.
Basic Types of Trusts:
- There are many types of trusts; a major distinction between them is whether they are revocable or irrevocable.
- Also known as a Living Trust, a Revocable Trust can help assets pass outside of probate while allowing you to retain control of the assets during your lifetime. It is flexible and can be revoked or amended at any time. A Revocable Trust typically becomes Irrevocable upon the death of the grantor.
- An Irrevocable Trust typically transfers your assets out of your estate and potentially out of the reach of estate taxes and probate but cannot be revoked or amended after it has been executed. Therefore, once you establish the trust, you will lose control over the assets.
Choosing and creating a trust can be a complex process; the guidance of an Estate Planning Attorney is highly recommended. For more information on Estate Planning or to take advantage of our complimentary review of an existing estate plan, please contact us. We are here to help.