Estate Planning documents (General Durable Power of Attorney, Health Care Power of Attorney, Medical Release, Digital Release, Last Will and Testament) are basic legal documents every adult should maintain. Some families need to go beyond the “basic” estate planning documents. The depth of an Estate Plan varies for each client. Trust planning helps a lot of our clients meet their goals.
A Trust is a legally binding agreement; it’s a contract. There are three parties to every trust. First is the creator, also known as the grantor. The creator does exactly that, creates the trust. The second party is the trustee(s). A trustee is appointed by the grantor and has a fiduciary duty to manage and distribute trust property according to the instructions given by the grantor. The third party is the Beneficiary. The beneficiary is the person that benefits form the trust. Often the first beneficiary is the Grantor and then the grantor’s family. A typical Revocable Trust is an agreement where the Grantor names himself/herself as the Trustee and the Beneficiary, and then leaves an ongoing trust for the surviving spouse, the children, and grandchildren. This kind of trust does not require a tax id number or any additional tax filings until the grantor dies.
There are many variations of Trusts. There are Revocable Trusts, Irrevocable, Trusts, Will Based Trusts, Joint Trusts, Stand Alone Trusts, and more. Each type of trust offers its own set of pros and cons. Generally speaking, a trust gives you control now (if you’re the appointed trustee) and allows you to give instructions to any current or future trustee.
So who should have a trust? Below are examples of who should utilize Trusts as part of their planning.
-If you have significant financial means
-If you own real estate in more than one state
-Complicated Family Situations (Multiple marriages, adult children from previous marriage)
-Concerns regarding Children or Grandchildren (spend thrift, addictions, doomed marriage)
-You want asset protection for your spouse, your children, and/or your grandchildren.
-You want to protect your spouse and your children’s inheritance at the same time.
-You want to protect your children’s inheritance after your death from your spouse’s remarriage.
-You want to avoid the costs of probate and court administration of your estate
-You want to keep your estate matters private and not a public record.
-You want or need to create a binding plan on how to provide for you if you become disabled.
-You want greater control of when and how your estate is enjoyed by your family.
-You want things to be simpler and faster for your family upon your death.
If any of the above applies to you or you’d like to know more about trust planning for yourself or loved one, call our office to schedule an appointment.