A trust can be a valuable tool in your estate planning in the right circumstances. Trusts can give you the ability to immediately transfer assets and provide for beneficiaries without the need for probate. A trust sets up a legal relationship in which property or assets of the grantor are held by the trustee for the benefit of the beneficiary.
Reasons to set up a trust:
- To make provision for minor children
- To provide for other family members who are unable to handle their own financial matters
- To provide for yourself in the event you become either physically or mentally incapable of handling your financial matters.
- To reduce estate taxes
- To avoid probate
A trust can contain any provision that is not in conflict with state law and, unlike a will, remains private. A trust allows for assets to be immediately transferred upon your death, without the need for proceedings in probate court. The grantor can also be the beneficiary, with a trustee to carry out the wishes of the grantor and provide for the grantor through distribution from the trust.
What you should consider when setting up a trust:
- Should you have a Living Trust or a Testamentary (after-death) Trust?
- Should you have a revocable trust or irrevocable?
- How and at what age will assets be distributed to your children?
- Do you want to allow the beneficiary to remove and replace an unsatisfactory trustee?
A trust is just one of many instruments you may want to consider when planning your estate. The flexibility of trusts can make them useful in many situations and for many purposes. Trusts that are set up properly can give you peace of mind and greater ability to control how certain assets and property are distributed.
Choosing the right person to administer your trust is essential. Remember, however, that few people will have any experience in administering a trust, and may need assistance or have questions about how to proceed. At Santa Barbara Estate Services, we specialize in helping with trust administration, either as trustee, or providing assistance to the trustee. For more information on trust administration, contact us.
