Understanding Trusts
A trust is a relationship between several individuals whereby property and assets are transferred by one or more persons, and held by a second or more for the benefit of a third. The creator of the trust is known as the “grantor, settler, or donor.” He or she transfers property and assets to a “trustee” who has a legal duty to abide by the instructions of the trust for the benefit of the “beneficiary.”
There are many different types of trusts recognized under the law. The type of trust associated with planning an estate is a called a “living trust,” also known as a “revocable trust” or an “inter-vivos trust.” A living trust is a formal legal document that, when executed, holds ownership (or “title”) to the property and assets listed in document.
Advantages of a Living Trust
Living trusts are similar to wills as they both provide instructions for how your estate will be distributed at your death; however, unlike a will, a living trust does not need to be “probated.” Probate is the process by which your name is legally removed from a property or asset after your death and ownership is placed in your beneficiary. This process can often be time consuming, expensive, and at times, very contentious.
- A properly drafted living trust helps you avoid the complexities and inconveniences of probate because your ownership of the property or assets has already been transferred to the trust prior to death. This makes the process of transferring the property or assets to your beneficiary significantly easier and no court intervention is required.
- Additional benefits of a living trust include its flexibility. If you set up a living trust, you can alter or amend the document at anytime.
- Also, you can transfer full ownership of your property and assets to a trust but continue to use and manage them during your lifetime.
- Finally, living trusts, unlike wills, allow for non-probate assets such as IRAs, insurance, and annuities.
Setting up a Living Trust
Living trusts have become increasingly common as a substitute for a will; however, much like a will, setting up a trust is complex. You need the assurance that your trust will be set up correctly. In order to accomplish that, you need an experienced, skilled and compassionate attorney, one who will carefully listen to all of your issues and concerns, making certain the instrument created clearly and effectively communicates all your intentions.
Worcester Elder Law attorney, Paula Smith has all of these qualities. For years, Ms. Smith has represented individuals across Worcester and helped them through this sensitive and challenging time in their lives. She has works closely with clients to create trusts that fully articulate their wishes and effectively address every potential legal issue that may arise.