Trusts only have three components
The Grantor makes the trust, makes the rules and funds the trust.
The Trustee executes the rules the Grantor put in the trust.
The beneficiary receives the benefits of the trust.
In most trusts created in the United States, the grantors, trustees and beneficiaries begin as the same people. A husband and wife create the trust, execute the trust as trustees and benefit from the money in the trust or the assets of the trust. It is when the husband and wife pass away that the trust document is tested. This is when the lawyer you hired earns his keep. Or it is when the document comes apart and you end up in court. This is why experience is so important; inexperience will lead you to unforeseen errors and catastrophic results.
The Primary Benefits of Using a Trust
The most powerful estate planning tool you can utilize is a trust. Trusts have many great benefits which include protecting assets, protecting your loved ones and protecting your loved ones’ beneficial interests. Most people are familiar with having a will, but most people are not as familiar with the idea of a trust. Why should you use a trust and what can it do for your estate plan? Keep looking through this website and you will learn the advantages of a trust.
Trusts identify trustees and trustees administer the trust on behalf of the grantor. There is a legal duty, a fiduciary duty, that the trustee has to the beneficiaries. One of the main reasons to create this type of instrument is that it can avoid probate. For more benefits in creating a trust, read on.
Here are some of the the most important benefits in using a trust:
- Custom design: This means you can place specific restrictions on how property from your trust is distributed, how much is distributed, when it is distributed and to whom it is distributed. You can include reasons for distribution; for instance, matching the net income of the beneficiary’s first business. The ability to design your trust to specifically distribute your legacy in the future allows you to effect your wishes and your legacy.
- Avoid probate: Your trust allows your loved ones to avoid probate.
- Reduce estate taxes: Estate taxes can be very expensive. In specific situations, a trust can help bypass or reduce greatly an estate tax.
- Maintain privacy: Probate is public, trust administration is private. An entire industry exists that prays on those going through probate. They offer high interest loans and schemes that steal your legacy, steal your money.
- Avoid litigation: Trustees can impose contest clauses during the trust administration that avoid litigation to some degree. Trustees have substantial powers that dissuade most people from chasing assets by way of litigation. And while litigation can still result, it is much less likely.
These are just some of the many ways a trust can benefit your estate plan. It is important to consult with an experienced estate planning lawyer about your specific needs and what type of trust could benefit you.
WHAT YOU NEED TO KNOW ABOUT AT TRUST
They are simple to understand, but the legal implications of trust errors and mistakes is nothing less than an explosive nightmare that leaves your loved ones (and sometimes strangers) embroiled in litigation. The perfect example is George Washington. He did not use a trust, he used a will. He left his entire, substantial estate to his four heirs. They began to fight the day our first president passed away in 1799. These four people who loved each other prior to Mr. Washington’s death, ended up not speaking to one another for 50 years! The probate was closed in 1849. The only reason the probate closed after 50 years? The four heirs were dead. Do not offer your loved ones the nightmare of litigation or probate. These are equally dangerous outcomes.
Get In Touch
Law Office of Richard A. LewisAddress: 2020 L Street, Suite 220
Sacramento, CA 95811 Phone: 916-446-4141 Business Hours: 9a-5p M-F, Weekends by Appointment Only