Do You Need a Trust?
The Trust typically gives the trustee instructions as to how the property should be handled and the purposes for which distributions of trust income and/or principal (the funds initially placed into Trust) can be made to the beneficiaries. A Trust can be restrictive or flexible as to the trustee's powers depending on the preference of the individual establishing the Trust and the purpose for which the Trust is established.
Generally, the trust will name “successor” trustees in case the original trustee dies or becomes unable to fulfill his/her obligations as trustee. It is permitable to have co-trustees and trustees do not have to be related to the grantor or beneficiaries.
An advantage that trusts have over Wills are as follows:
One, avoids probate;
Two, provides for guardianship planning;
Three, is private; and
Four, provides for quick, efficient administration.
If the grantors of a trust are married, own all of the assets jointly, and have an estate of less than $1,500,000.00 they most likely would have a joint trust in which they serve as co-trustees. If the grantors own assets separately or have an estate over $1,500,000.00, two trusts should be considered. This often is the case with second marriages.
Trusts can be used to replace wills or to be used along with wills. A “Pour-Over” Will is a will that pours over everything in the will into the trust upon the death of the creator of the Will.
A Trust can be a very useful tool in the following situations. For more information on each, please click on the link.
An Incompetent/Irresponsible or immature beneficiary;
Several Beneficiaries;
Keeping property "in the family";
Managing behavior;
Avoiding probate.