What Is a Trust and What Powers Does a Trustee Have?
What is a trust? There are many benefits to setting up a trust. Read about how a trust is established, the benefits of a trust, and the powers of a trustee.
What is a Trust is the subject of this blog. If you're scared of death, you're not alone. Around 20.3% of Americans report being "afraid" or "very afraid" of death.
Unfortunately, this fear can have devastating consequences for Chandler residents. Because people don't want to think about their passing, many fail to have proper estate planning. This lack of foresight can lead to unnecessary hardship for your family.
Our guide is here to shed light on this uncomfortable topic. A very common type of estate planning is to create a Trust. Read on to learn "What is a trust?" and why you might want to get one. We also go over the role of a trustee should you ever find yourself in this position.
What Is a Trust?
A trust is an agreement between a trustor (also known as a settlor or grantor) and a trustee. The trustor gives the trustee the right to hold their assets for a third party (also known as the beneficiary).
What Is a Living Trust?
When you research estate planning in Chandler, you'll notice that there are different types of trusts.
For our purposes, we'll focus on a living trust. A grantor creates this type of agreement during their lifetime and uses it to control their assets.
When the grantor passes away, the trust allows their assets to transfer to the next trustee in line. The trustee then distributes these assets to the appropriate beneficiaries or there are more sophisticated strategies that can be discussed with an attorney (like to create a dynasty trust for your family).
Benefits of a Trust
After years of providing expert advice about trusts, we know a thing or two about their benefits. Here are a few of the most compelling reasons why a Chandler resident might want to enter this type of agreement:
Fulfill Your Wishes
When you pass, you want to know that your family is taken care of. A trustee can fulfill your wishes and ensure everyone gets the assets they are entitled to.
Avoid Probate Court
Your death will take an emotional toll on their family. The good news is that a trust can reduce further suffering by avoiding probate court proceedings. Beneficiaries will save time and money while avoiding unnecessary stress. Probate is not only expensive but also time consuming.
Avoid Excessive Tax
Trusts are ideal if you want the majority of your assets to go straight to your beneficiaries. These agreements can avoid estate and inheritance tax depending of the size of your assets. Working with an estate planning attorney in Chandler will help define the best strategy for your specific situation.
What Does a Trustee Do?
Lastly, our guide to trusts will discuss the role of the trustee.
The trustee is responsible for carrying out the grantor's wishes and follow the guidelines of the trust. They must distribute assets to the appropriate beneficiaries and handle tax filings, or follow any other strategies that were created when the Trust was created. The Trust administration process is much easier than a probate.
Additionally, the trustee should be prepared to work with the executor of the will (if there is one) in case the Trust was not properly funded. By coordinating their responsibilities, they'll ensure that they fulfill the wishes of the grantor.
The Bottom Line — Should You Get a Trust?
We know that the last thing you want to think about is your death. But if you want to protect your family in Chandler, estate planning is essential. Our estate planning attorneys at Citadel Law Firm will be pleased to help.
Our guide on "What is a trust?" should help you determine if this agreement is right for you. Need additional advice? Contact our estate planning firm in Chandler and trust attorney Chandler today! Click here to schedule a free consultation or call (480)565-8020 today.