Trusts
A Trust is a legal entity that controls assets that are placed into it. A Trustor or Settlor is the person who creates a trust. The Trustor decides who is entitled to receive income and/or principal payments from the trust. These individuals are the Beneficiaries. The indiviual chosen to administer the trust is called the Trustee. Trust Terms are the rules that set forth how the trust is to operate, and often these rules provide for how long a trust will continue, who receives distributions, and a number of other issues. Property transferred to the rust is sometimes referred to as the corpus of the trust or the res. The Trust Agreement is the document that defines all the details of the trust. Trusts are powerful estate planning tools when used appropriately.
A Trust may be a good idea where an individual is concerned about the ability of their children to effectively manage an inheritance. In certain cases, a child my have a demonstrated lack of financial skill. Substance abuse is often a serious concern when parents are considering creating a trust for the child. In these cases, an inheritance given to the child may do more harm than good, or may end up in the wrong hands. In these situations, and others, a trust can protect the child by placing the assets under the care of a fiduciary. Trusts have a variety of names, some common types are:
- * Discretionary trusts
- * Asset protection trusts
- * Life insurance trusts
- * Spendthrift trusts
- * Beach-bum trust provisions
McGuire Gardner can help you understand these and other trust tools.
Living Trusts
Living Trusts are those that are created while you are alive. Such trusts can provide certain protections for your assets and reduce your taxable estate upon death.
Asset Protection:
The more assets you acquire in this life, the more attractive a litigation target you become. Asse protection planning can help insulate your assets from the opportunistic. A living trust, used with other tools, can be an effective method to protect your assets.
We can help you shield your business and family assets. Planning withing the law, it is possible to deter potential creditors from pursuing you, and in many cases frustrate them when they do.
Many tools can be used for asset protection including, Irrevocable Life Insurance Trusts, Family Limited Partnerships, and others. These tools make it difficult for a future creditor to collect and can deter litigaiton.
Reduction of Taxable Estate
The transfer of wealth at death can be severly taxed in some cases. Living trusts can reduce your taxable estate.
We can also help you understand the advantages of a living will.
Testamentary Trusts
Testamentary trusts are created after an individual dies by operation of a separate instrument. They may be used to provide for the management of testamentary funds that would pass to minors after a parents’ death. Such trusts can avoid the necessiy of probate and eliminate the need for a court appointed conservator.
Specialized Trusts
Special trusts can be used to meet the issues raised in blended-family situations, or to avoid estate tax. They can be living or testamentary trusts. Common special trusts include: