Trusts
What is a trust?
Trusts are an extremely versatile tool for accomplishing a variety of estate planning and business goals. Like a will and the executor listed in the will, a trust is physically just a several pages of written instructions from the creator of the trust to the trustee who carries out the instructions. While a trust can essentially replace a will, a "pour-over" will is still needed to act as a backup for any assets not transferred to the trust.
How does a trust work?
After a trust is created, assets are typically re-titled in the name of the acting trustee of the trust. The trustee takes legal ownershp of the assets, but manages and distributes the assets for the benefit of those listed as beneficiaries. Trusts can be revocable or irrevocable. A settlor (trust creator) can also act as trustee and be beneficiary too in a self-settled trust, or the settlor, trustee, and beneficiaries can all be different individuals, bank trust departments, or charities.
Example Uses for Trusts
Revocable trusts function as will substitutes and probate avoidance mechanisms. Other types of trusts include:
- Irrevocable Life Insurance Trusts ("ILITs")
- Qualified Personal Residence Trusts ("QPRTs")
- Special Needs Trusts
- Dynasty Trusts
- "Miller Trusts"
- Retirement Trusts
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