TRUSTS (Glossary)
A Trust is a fictitious legal entity that owns assets for the benefit of a third person. Trusts are sometimes thought to be used only to the millionaires among us. In fact, a Trust can be a useful tool for anyone who would like to avoid the costs associated with probate, avoid paying some death taxes, and provide some limitations on their young children’s ability to access money left to them.

A Trust is a legal property interest held by one person (called the Trustee) For the benefit of another person (called the Beneficiary). The person establishing the Trust is called the Grantor. A Trust can be revocable or irrevocable.

Revocable Trust:
A revocable Trust is one that can be changed or terminated by the grantor or any time and for any reason.

Irrevocable Trust:
An irrevocable Trust, once established cannot be terminated or altered for any reason.

A Trust is created by a document that creates a fiduciary relationship between the person who holds title to property and the person for whose benefit the property is being held. In the estate planning context, a Trust can serve a variety if purposes.

  • to protect property for beneficiaries
  • to manage investment assets
  • to avoid guardianship of the property and probate for the property owner
  • to avoid guardianship and probate requirements that apply to property transfers to minors and other incapacitated individuals
  • to assure privacy in the transfer of property at death
  • to use a document which may have greater chance of withstanding a challenge of lack of capacity or undue influence than a Last Will and Testament alone would
  • to reduce taxes

Go to the Learning Center and listen

    Trusts - Their Benefits and Uses

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