WHAT IS A TRUST & WHY DO YOU NEED ONE?

 A trust is a legal arrangement that allows a person to transfer assets to a trustee to be held for the benefit of a beneficiary. The trustee is obligated to manage the assets according to the trust document and in the best interests of the beneficiary.  

 Trust participants 

• Settlor or Grantor: The person who transfers assets into the trust
• Trustee: The person who holds and manages the assets
• Beneficiary: The person who receives the benefit of the assets

Trust assets can include cash, real estate, stocks, bonds, artwork, collectibles, and family heirlooms. 

A trust is formed under state law and requires the following: 

• A grantor with the intent and capacity to create the trust
• A definitive beneficiary
• A trustee
• Assets
• Legal formalities, such as being in writing, signed, and notarized

As an estate planning tool, a trust has the following benefits:

• Avoiding probate court so Beneficiaries can receive assets sooner
• Privacy
• Protection
• Reduced or eliminated estate and gift taxes
• The ability to better-control future wealth by establishing conditions for asset-distribution

There are multiple types of Trusts, and it’s important to really assess your needs and goals before you decide on which type you’ll create. We’ll discuss in more detail the types of Trusts below. 

A living trust is a legal document that allows you to transfer your assets into a trust during your lifetime. The trust is managed by a trustee, who is responsible for distributing the assets to your beneficiaries according to your wishes.

A living trust can help you avoid probate, which can be a lengthy and expensive process. It also provides more privacy than a will, which becomes a matter of public record after your death. Additionally, a living trust can be used to protect assets from creditors and provide for minor or disabled beneficiaries.

• Living Trust is created while the grantor is alive, allowing assets to be transferred outside of probate.
• Testamentary Trust is created through a will and takes effect after the grantor's death 
• Protective Trust is a type of trust that can protect assets from lawsuits and other adverse actions 
• Special-needs Trust is a type of trust that can help provide for family members with special needs