Trusts are a legal arrangement that has been used for centuries to protect and manage assets according to a trust lawyer from Kaplan Law Practice, LLC. Trusts can be very important to establish ahead of time in case you or a loved one ever experiences a personal injury incident. While many people have heard of trusts, there are several things about trusts that may come as a surprise. Here are some things you may not know about trusts:
- Trusts are not just for the wealthy
While trusts have historically been associated with the wealthy, anyone can create a trust. A trust can be a valuable tool for anyone who wants to protect their assets, ensure their loved ones are taken care of, or minimize their tax burden. Trusts can even be established for your pets!
- There are two types
There are two main types of trusts: revocable trusts and irrevocable trusts. Revocable trusts can be changed or terminated at any time by the grantor (the person who creates the trust). Irrevocable trusts, on the other hand, cannot be changed or terminated once they are created. An attorney can advise you as to which type of trust bet suits your situation.
- Trusts can be used to avoid probate
When someone dies, their assets generally go through a legal process called probate. This can be a lengthy and expensive process, and in some cases, assets may be tied up in probate for years. By placing assets in a trust, those assets can avoid probate and be distributed to the beneficiaries immediately after the grantor’s death. Additionally, by avoiding probate, your loved ones will not have to worry about arguing over who gets what.
- Trusts can provide asset protection
Assets held in a trust may be protected from creditors, lawsuits, and other potential threats. This is because the assets technically belong to the trust, not the individual grantor or beneficiary.
- Trusts can be used for charitable giving
Charitable trusts are a type of trust that allows the grantor to make a donation to a charity while also receiving some tax benefits. This is a common type of estate planning for those that have a lot of assets to distribute or who have no relatives left. There are two main types of charitable trusts: charitable remainder trusts and charitable lead trusts.
- Trusts can be used for estate planning
Trusts are a valuable tool for estate planning. By creating a trust, a grantor can ensure that their assets are distributed according to their wishes after they die, and can minimize the tax burden on their estate. Other types of estate planning you are most likely familiar with would be wills.
- Trusts can be used to provide for minor children
A trust can be created to provide for minor children in the event that their parents die before they reach adulthood. This type of trust is often called a “trust for minors” or a “minor’s trust.” These do not have to be created solely for estate planning purposes — they can also be created for those who have wealth they would like to distribute to their children when they come of age.
In conclusion, trusts are a versatile and valuable tool that can be used for a variety of purposes. It is important to take some time to determine what you want to do with your assets in the future. If you are interested in creating a trust, it is important to consult with an experienced attorney who can guide you through the process and ensure that your wishes are properly documented.