Many people have the idea that trusts are only for the very wealthy. At one time, that may have been largely the case, but estate planning attorneys today use trusts for many different purposes to protect the assets of families in all economic situations.
Trusts can be set up to use during your lifetime or as a way to pass property easily to loved ones after your death. Huizenga Law can prepare a variety of trusts to reach your goals and we would be happy to discuss your options.
How a Trust Works
A trust is a legal entity set up to hold property. You might think of it as a container that can hold assets such as bank accounts, real estate, vehicles, and other property. When property is transferred into the trust, the trust technically owns it. The person who manages the property in the trust is the trustee, and that person has a fiduciary duty to protect the property and manage it wisely so that it can be used by another person, the beneficiary.
Many people have provisions in their will to establish a trust for their children if the parents pass away before the children reach the age of majority. The children are the beneficiaries and the person designated as trustee would manage their property for them until they are old enough to do so.
Revocable Living Trusts
One of the most popular trusts that we create for families operates a little differently than the traditional trust situation. With a revocable living trust, the person who creates the trust and transfers property into the trust also serves as trustee and beneficiary. They control and use their property in exactly the same way as they did before it was transferred into the trust. Why go to the trouble?
We create these trusts to serve a couple of purposes. The first reason is that when the person who created the trust passes away, property in the trust can pass directly to alternate beneficiaries directly without going through probate. This saves considerable time, money, and confusion for loved ones.
Another benefit from creating a living trust is that in addition to naming alternate beneficiaries, you can also name an alternate trustee. That person will manage the trust and distribute your assets after you pass, but you can also include a provision enabling that alternate trustee to manage your financial affairs if you become incapacitated. This protects you during your lifetime if you are unable to make or communicate financial decisions due to illness or injury.
Other Types of Trusts
While revocable living trusts are one of the most popular types of trusts we create for clients, there are many others, most of which are irrevocable trusts. Once someone transfers property into an irrevocable trust, they cannot remove it or control it, but they may still derive some benefits from it while it is protected in the trust. We develop trusts to accomplish goals such as:
- Establishing eligibility for Medicaid long-term care benefits
- Providing for a loved one with special needs without interfering with eligibility for government benefits
- Caring for minor children
- Protecting assets of individuals who need assistance managing money
- Decreasing tax liability
- Providing for care of pets or other animals
The full variety of trust options is far too long to list. If you tell us your goals, we can discuss whether a trust might be the best way to help you get there.
Find Out More About How a Trust Could Protect Your Family
At Huizenga Law, we are always searching for the best ways to help our clients protect their families and all that they’ve worked so hard to achieve. The sooner you begin working on a plan, the more options you have available. Contact us today to learn whether a trust should be part of your estate plan.