One of the most popular types of estate planning tools that many people use is a trust. Estate planning attorneys often recommend trusts for their clients because of the benefits they offer. For one thing, trusts allow beneficiaries to skip the probate process, which can be time-consuming and expensive. In order to make sure the trust you set up meets all state laws, you will want the assistance of an estate planning attorney.
The following is an overview of how trusts work. Contact an attorney for more detailed information and how trust can benefit your situation.
Who are the parties in a trust?
There are three parties to a trust:
- The grantor, who is the individual who is giving the property or asset.
- The trustee, who is the party who will oversee the property or assets that are contained in the trust.
- The beneficiary, who is the party for which the trust was created for.
What are the types of trusts?
There are two types of trusts that a person can set up – a revocable trust and an irrevocable trust. A revocable trust is also called a living trust. It can be changed and even canceled once it has been set up. An irrevocable trust cannot be revised, nor can it be revoked, once it has been established.
In a living trust, one of the most popular in estate planning, the grantor will pick a trustee, however, in the majority of cases, they appoint themselves as trustee. Any property or assets that are in the trust are under the ownership of the trust. Upon the death of the grantor, the contents of the trust are immediately transferred to the beneficiary, which totally avoids the entire probate process. The grantor does have the option to add stipulations specifying whether or not the beneficiary will have immediate access to the property in the trust or if there will be another trustee appointed who will oversee the trust.
What is a trustee allowed or required to do?
The following are some of the duties or responsibilities the trustee may need to address:
- Appoint or hire attorneys, advisors, or other experts to help with trust
- Assign trustees to perform needed duties for the trust in other jurisdictions
- Distribute the assets and property of the trust to beneficiaries as directed by the grantor
- Enter into leasing agreements
- Execute instruments, contracts, or other documents as needed
- Exercise ownership rights in agreements with financial institutions, bonds, stocks, or security transactions
- Grant divisions or easements
- Insure interests of the trust
- Invest interests of the trust
- Mortgage or borrow from the trust contents
- Negotiate purchase options or sell any portion of the trust
- Pay expenses associated with trust contents
- Pay taxes associated with trust contents
If you would like to find out more information about the different types of trusts and how these tools can benefit your estate plans, contact a trust lawyer St. Peters, Missouri relies on to set up a free consultation with one of our skilled estate planning attorneys.
Thank you to our friends and contributors at the Legacy Law Center for their knowledge about trusts and estate planning.