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How is a trust helpful in estate planning?
A Trust, if properly drawn and funded, can be extremely helpful in many situations such as:
(1) To avoid a conservatorship. If property is held in a Trust, a successor Trustee can step in and take over management of assets if the Trust Creator becomes disabled. This avoids the delay and expense of going to court to appoint a Conservator to manage the property.
(2) To avoid probate. Probate is a process where a court oversees the distribution of a person’s estate after that person dies. A properly drawn Trust is a separate entity that does not die when the Creator dies. The successor Trustee can take over management of the Trust estate and do everything the Trust provisions allow, such as paying bills and taxes and promptly distributing the Trust assets to the Beneficiaries without court supervision.
(3) Maintaining privacy. Trusts, unlike Wills, are generally private documents. If you leave a Will that goes to probate, your neighbors and the public will be able to see how much you had and who your Beneficiaries are. In a conservatorship hearing, all your private affairs may be discussed in open court. A Trust can protect your privacy in most situations.
(4) Help keep certain property separate from other property. For example, if you want your daughter to get your vacation home, and your son to get your house in the suburbs, if you create a separate Trust for each property there would be no question of commingling or who gets what.
(5) Make challenges to your wishes for distribution of your property more difficult. For example if you cut a close relative out of receiving, or if you leave less to one child who has already received more financial help than the others during your life, that person might threaten or bring a Will challenge if you use a Will to distribute your property. If you use an inter vivos Trust instead of a Will, the Trust will be more difficult to challenge. The Trust is not just set up and executed at one point in time. It is set up, property is transferred to it, and the Trust operates, perhaps for years, before the death of the Grantor. It is much more difficult to prove that the Grantor was incompetent or unduly influenced during the whole time period when the Trust existed and operated than to prove the deceased was incompetent at the one point when a Will was signed.
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Who should have a trust?
How much do trusts cost?
What is a trust?
How is a trust helpful in estate planning?
Who are the parties to a trust?
How long does it take to settle a trust and what can I do if it isn't done in a reasonable time?
What is the difference between a will and a trust?
Can my father contest the terms of my grandfather's trust if there is a no-contest clause in it?
Would a Trust Be Better Than a Will?
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Need help drafting a trust? |
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