New Year’s Resolution Series (Part Five): Trusts
March 23, 2023
Springtime is right around the corner, but that doesn’t mean you have to give up on your New Year’s resolutions. One of the greatest things about resolutions is they don’t come with a deadline. Instead, they provide us with an opportunity to recognize our goals so we can work to achieve them. Do you plan to incorporate trusts into your goals this year?
Like wills or power of attorney documents, trusts are a vital part of the estate planning process. They allow you to manage your family’s wealth according to your exact wishes. For many, trusts are also ideal tools for protecting a loved one’s future. Our fifth installment in this series examines the basics of trusts and what they can do for you.
Trusts: Key Questions Answered
What is a Trust and What Can You Do with One?
A trust is a property interest held by a trustee that is eventually passed down to a beneficiary. A grantor, the individual who owns assets, allows a designated trustee to hold these assets for the benefit of someone else. The trustee then manages the trust until it is granted. A trust can be passed down to the beneficiary after the grantor has passed or during their lifetime.
In many cases, trusts are put in place for children. You may want to provide financial assistance for future college, living, or health care expenses. Perhaps you want your child to have access to these funds once they turn 18 and ensure that they’re used for a specific purpose. You can do that with a trust. However, trusts can also be created for nonprofit organizations or schools. Ultimately, the idea is to set aside your assets properly and ensure they’re distributed in line with your wishes.
What Types of Trusts Are There?
There are many different types of trusts, but the most common are revocable and irrevocable trusts. With a revocable trust, the grantor can revoke or amend the provisions of the trust. These changes can be made during a grantor’s lifetime. Irrevocable trusts, on the other hand, cannot be altered or taken away once they’ve been established. The grantor no longer owns the rights to the assets they’ve set aside in this scenario.
Some examples of other types of trusts are testamentary trusts and special needs trusts. Testamentary trusts don’t go into effect until the grantor passes away. This is created through a Last Will and Testament. Special needs trusts are created specifically for a loved one with a disability. This type of trust provides additional support for the individual in addition to any government funds they may be entitled to.
As you can see, you have many different options. You might not know which is best for your family, and that’s perfectly normal. An experienced estate planning attorney can sit down with you to discuss your situation and find the right solution.
Why Should You Include a Trust in Your New Year’s Resolutions?
Unlike wills, trusts are considered private agreements. This means your beneficiary won’t have to go through probate to obtain their property. Many opt for trusts because they sometimes come with tax benefits and they’re highly flexible.
If you have assets you want to pass down for the benefit of another person, trusts are the perfect tool. However, Trusts are not for everyone, so seek legal advice to determine if this is right for you.
Want to Know More about Trusts? Partner with Atkinson Law. We’ll Take Care of You Like Family.
At Atkinson Law, we listen to all our clients and protect their interests so they can receive a positive legal outcome. We’ll work with you and give you the best possible recommendation for your future. To learn more about estate planning and trusts, contact us today by calling (410) 882-9595 or visiting our website.