Why Should You Trust a Trust?
What is a Trust? Why would you want a trust? This article contains some general information which goes along with a series of videos where I talk about Estate planning and the various options for Estate planning that might help you. So what is a trust?
A trust is a legal document. It’s an agreement between you and whoever the trustees of your trust are. There are two different main types of trusts. One is a revocable trust. That means you can take back whatever you put in it and the other is an irrevocable trust meaning you can’t take back what’s in it. In a revocable trust, you are the trustee of your own trust. There are many types of trust, I won’t go into all of the details here but your trust says what happens someday when you die. The irrevocable trust does that as well. Once you give something to the irrevocable trust, you can’t take it back.
The advantages of a Trust
There are a lot of advantages to having a trust. One of them is the assets in the trust do not have to go through probate to change title because you’ve already determined that in the trust. The trustee can follow your directions in the trust. Another big benefit to having a trust is what I’m holding in my hand. So you’re wondering why is he holding that a tube of toothpaste? Well, a trust is like a tube of toothpaste in some ways because it protects what’s inside it.
The Trust protects from liabilities. It also protects from Will contests, from beneficiaries or heirs. Lastly, it protects what’s in here from creditors, from lawsuits, And many other things. There are different rules regarding that. Some of them have to do with whether you created the trust, or if someone else created it for you. And that will vary by state. But the important thing to note is what’s in the tube is protected- just like toothpaste. If we squeeze some right out, it’s no longer protected. And we can’t get it back into the tube very easily.
Similar to a trust, if you take assets and put them in the trust, you can take them out, you can take income from the trust. Your beneficiaries could take income, but once the assets come out of the trust, they are no longer protected. You want to keep them in the trust as long as possible, so you can have the assets in the trust go to your beneficiaries and they can even stay in the trust for years and years to come for the benefit of your descendants. So that’s a little bit about trusts, I have other videos that talk about other estate planning topics as well as other areas of our practice to help you.
Leonick Law helps clients with Trusts, and additional Estate Planning documents. For more information, please visit our estate planning page.