Skillfully Managing Your Assets
When creating an estate plan, one of the most important and popular tools that an estate planning attorney can utilize is a trust. Legal documents that can supplement or replace wills, trusts allow you to manage your property and ensure your estate is handled according to your wishes after you’re gone. Dealing with these complex financial matters early can make a world of difference for your spouse and family in the future.
Steps To Creating A Trust
Trusts are a transfer of legal ownership from an individual to an institution or person. The owner is referred to as the grantor or trustor and the person who administers the trust is called the trustee. Beneficiaries receive the property or assets from the trustee. The trustee and beneficiary enter a “fiduciary” relationship, which means the trustee must act in the best financial interests of the beneficiary when managing the trust and its assets.
Trusts can be formed individually or jointly. Married couples usually form joint trusts, but individual trusts can be used for each spouse. Individual trusts are helpful when couples have individual property or inheritances they want to keep separate.
The first step in creating a trust is to determine what you want to include in the trusts. Property and assets can be included, as well as bank accounts, stocks, retirement accounts and other forms of property. The next step is to designate a trustee to manage the trust. For a living trust, you can act as your own trustee but must choose a successor trustee to take over should you be incapacitated or pass away.
Choosing The Right Type Of Trust
There are two main categories of trusts: testamentary and living. A living trust, like the name suggests, is in place during the life of the grantor or trustor and may continue after their death. Using a living trust helps to avoid a lengthy probate process. Testamentary trusts go into effect after the death of the grantor and help distribute benefits over a period of time.
Living trusts are also designated as revocable or irrevocable. In the case of a revocable trust, the grantor can make changes to or revoke terms of the trust at any time. For irrevocable trusts, the grantor gives up the right to make changes after the document is drafted. Another form, the charitable trust, benefits a charity or group and can help to lower estate or gift taxes.
Secure Your Financial Future
Planning your estate while you are of sound mind can prevent a lot of expense and disputes down the road. To start the process with the skilled and knowledgeable attorneys at Wolfe, Rice & Quinn, LLC, call 717-253-9182 today or send an email.