What is a Trust?
A property owner creates a trust when they transfer the legal title, ownership of the property, to the Trustee, who has a legal duty to hold and manage the property in the best interest of the beneficiary (or beneficiaries). The original property owner is usually the same person as the initial Trustee.
How is a Trust created?
The property owner (called the grantor or settlor) can write out the terms of the trust in a trust agreement or in a Will. The latter is called a testamentary trust, which is a trust that is created upon the death of the grantor (or testator). If you have minor children, I draft your Will to contain a testamentary trust in order to provide for your minor child.
When a trust is created during the lifetime of the grantor, it is called a living trust. Living trusts provide terms or rules for the management of property while the grantor is alive, and then provides for the distribution of assets after the grantor’s death.
What does a Trust cost?
The cost depends on the type of trust or the number of deeds, additional documents, and trusts involved. This is why I charge hourly for trusts, but I do give estimates.
What are the advantages of Trusts?
Trusts allow for management and control over property for many years after death. A trust requires that property be controlled by the terms of the trust agreement.
If privacy is your primary concern, then a trust is the best option because a trust can keep your property out of probate and can keep family assets and values private.
A living trust may also be appropriate if you own real estate in multiple states. Depending on the laws of the state where the real estate is located, a trust may be used to avoid an ancillary probate in other states.
A trust is also a good way to plan for a spouse’s incapacity. A trustee is legally obligated to spend the trust funds for the benefit of the beneficiary in accordance with the terms of the trust, and thus an incapacitated beneficiary may be better protected.
The truth about Trusts. Click this link to see my post debunking common trust myths.