A trust is a legal entity that has distinct rights like a person or a corporation. As the grantor, you can put assets into the trust and assign a trustee. A trustee is the person who manages the trust. This can be anyone you choose. As the grantor, you decide who gets the assets in the trust, typically your family members or a charity of your choice, those are the beneficiaries of your trust. You can add specific instructions for your trust. Like providing money for education or for special needs care. The appointed trustee manages the trust based on your instructions.
The benefits of a trust include:
- Protecting your assets
- Minimizing taxes
- Helping a family member handle their financial affairs
- Controlling your wealth
- Qualify for government programs
- Protect you or your loved ones against future legal action
There are two main types of trusts, revokable and irrevocable. A revokable trust, also known as a living trust, allows you to make changes to the trust and use the assets to your benefit. They can be easier to set up and prevents your estate from having to be submitted to the probate process.
Irrevocable trusts permanently remove assets from your taxable estate and cannot be changed once executed. An irrevocable trust is best when you want to minimize estate taxes, become eligible for government programs, or want to protect your assets from creditors, although there may be other reasons why you would choose an irrevocable trust.
There are also special needs trusts, marital trusts, credit shelter trusts, insurance trusts, and charitable trusts for example. Jennifer Gastelum Law is experienced in trusts and can help you decide which trust is best for you. Call today for a free consultation.