A trust is the legal right to the beneficial enjoyment of property to which another person holds the legal title. A trust is a great estate planning tool for anyone who wants to avoid the costs associated with probate, decrease the amount of taxes paid at death and provide limitations on their young children’s ability to access money left to them.
A trust is a legal property interest held by one person, called the trustee, for the benefit of another person, called the beneficiary. The person establishing the trust is called the grantor. The grantor chooses whom he or she wants to be the trustee. The trustee should be someone the grantor believes will carry out the purpose of the trust faithfully. The trustee cannot also be a beneficiary of the trust.
A trust can be revocable or irrevocable. A revocable trust can be changed or terminated by the grantor at any time, for any reason. An irrevocable trust, however, cannot be changed or terminated for any reason by the grantor at any time.
A trust also can be a living trust or a testamentary trust. A living trust, also known as an inter vivos trust, is created while you are alive and is not part of the probate estate, thus helping you avoid probate and the costs associated with it. A testamentary trust is created through a will, and as a consequence, generally must go through the probate process.
Some of the common reasons probate avoidance is desirable are: probated estates are open to the public, probate can be expensive, and the probate process can be time-consuming (typically one year from start to finish). Clients who are thinking about a living trust must balance the administrative responsibilities of establishing, funding and maintaining a living trust against the benefit of the probate avoidance. The Law Office of Carolyn Christoffersen assists each client as he or she sorts through these issues.
In addition to Living Trusts, there are many types of trusts that can be used to meet specific needs or purposes, including:
- Charitable trusts
- Insurance trusts
- Special needs trusts
- Spendthrift trusts
Trusts come in a variety of forms. Whether you are looking to bypass probate, donate to your favorite charity or provide care for a disabled adult child, an experienced estate planning attorney can help you choose the appropriate trust document for your situation. If you have questions about trusts or estate planning in general, contact the Law Office of Carolyn Christoffersen.