Trusts aren’t just for those who have wealthy estates. In fact, they can be extremely helpful for anyone who is growing older who wants to protect their assets.
Most of the time, people create estate plans without trusts. However, if you have several people who you’d like to leave assets to upon your death, then it is smart to look into having at least one trust.
What is a trust?
A trust is an agreement between two separate parties known as a trustee and settlor. The trustee is given the job of managing and protecting assets in the trust. The settlor, or you, in this circumstance, is the person who delivers assets into a trust.
The trustee has an important job because they are the only person allowed to manage the trust. They must manage the trust according to the trust’s instructions. They also have to distribute the trust according to the decedent’s wishes. The trustee is held to a high standard and owes a duty of care to make sure that the trust is protected and handled according to the settlor’s wishes.
Why set up a trust?
You might choose to set up a trust for several reasons including:
- To avoid court-supervised probate
- To set aside funds in case you become incapacitated
- To protect assets and control spending by beneficiaries
- To manage assets for business succession
Overall, there are many benefits to developing a trust with your estate plan. Your attorney can talk to you more about those benefits and if your estate would benefit from the protections that a trust can offer.