There are a lot of ways to setup a trust and most require help from a lawyer. Each type of trust offers unique benefits. Some help reduce estate and inheritance taxes, while others provide cash to cover the cost of taxes. Some provide money to beneficiaries while the decedent is still alive, while others make financial distributions for years after the date of death.
Irrespective of the type of trust established, each consists of three parties that include a Trustee, Trustor, and Beneficiary. The person that sets up the trust is the Trustor. The person managing the trust is the Trustee. Beneficiaries are the people or organizations that receive property and inheritance money from the Trustor.
An estate Trustee performs important tasks pertaining to estate settlement. This individual acts as the estate fiduciary and manages the transfer of inheritance property to beneficiaries. They are also in charge of settling the decedent’s estate according to directives provided in the last will and testament.
Setting up a trust is a relatively simple process, but will require assistance from an estate planning lawyer. This is particularly necessary when setting up an irrevocable trust. This type of trust offers a great deal of flexibility during the planning phase, but once in place an irrevocable trust cannot be changed without making a court appearance.
The cost to setup a trust can range from less than $100 to over $1,000. Much depends on the type and value of assets and the type of trust being established. Many people who only require a living trust and last will and testament may find it advantageous to use legal services such as LegalZoom.com.
All property that is put into a trust is removed from the estate and not required to endure the probate process. Probate is used to settle estates that have not been transferred to trusts. Assets held in probated estates cannot be passed along to heirs until all other facets of estate settlement are completed.
Writing a Will is essential whether an estate is safeguarded by a trust or required to pass through probate. The Will provides directives regarding how the estate needs to be settled, as well as appointing an estate agent and naming beneficiaries, for example via a private trust company or a domestic asset protection trust.
Irrespective of whether you use the services of an online provider, estate planner, or probate attorney it is a good idea to organize financial records and make a list of estate assets. It is advisable to discuss plans for designating a Trustee with the person before appointing them to the position within the Will.