People often think a trust is set up only by rich people, but that is not the case. Many people set up trusts, and the reasons are varied.
While some people set up revocable trusts to help with taxes, the majority of trusts are set up by people who want to make sure their assets go exactly where they want when they die.
Others want to set up trusts to provide assets for children, grandchildren, or others, but they want that money held for a specific purpose. These are only a few of the reasons.
Whatever your reason for considering setting up a trust, you may think it is complicated. We are here to help you understand how easy it is to set up a trust.
There are three main steps to consider.
Do You Need a Trust?
This is a question that you need to ask. In many cases, you can divvy up your assets in a will. Unfortunately, wills are sometimes subject to long probate periods, and a trust is not.
Think about what you would like those you are setting up the trust to have. Is it for something like college tuition, the purchase of a first house, or maybe to be used for a dreamed-of trip? These are all great reasons to set up a trust as you can specify what it is to be used for.
Another reason you might want to consider a trust is if you want someone, say your grandchild, to have what you are giving, but do not want their parents to take it for their use. And yet another example would be if you have a beloved pet that will outlive you and want to make sure it is taken care of properly when you are gone; you can set up a trust to provide a means for its future care.
If you decide a trust would be perfect for your situation, you then go on to the next step.
When Do You Want the Trust Distributed?
Sometimes, you may want to put stipulations on when the trust will be released to the intended recipient.
Maybe you want to have it released as soon as you pass. Alternatively, perhaps you want your grandchildren to reach a specific birthday, such as the age of 30; or reach a milestone, such as getting married or graduating from college; before the trust is released. You can make any stipulations regarding the trust you feel is appropriate. Doing this gives you a greater sense of peace knowing your assets will not go to something you would not approve of or be frittered away on trivial things.
Who Is Entrusted to Hold and Then Distribute the Trust?
Lastly, you need to choose a trustee. This is someone who will keep your trust safe until it is turned over to the benefactor. You want someone you can trust entirely with the management of the trust. They need to be financially smart, trustworthy, and preferably, someone who knows you well enough to understand your conditions.
While some people entrust this position to a relative or close friend, many go through a trust company or bank. If you do choose an individual, you will want to make provisions in case that person should not be able to carry out their duties due to circumstances such as death. With an institution, you will not have to worry about succession.
Let Us Help
If you are looking to set up a trust or need more information on the legal aspects of doing so, we here at Lilac City Law are ready and eager to help.
We want those who come to us to leave feeling that they have been heard and understood. We will work with you to help you set up the kind of estate plans that you are most comfortable with.
Contact us at any stage of your estate planning, and let us help take the stress and confusion out of the process.