A trust will remain in place long after you are gone. As such, you can use it to financially protect and provide for your loved ones in the long term. In addition, trust assets will be managed according to your instructions, which adds to the usefulness of these estate planning tools.
Given the many types of trusts available, it is beneficial to learn more about how they work and your best choice in achieving your estate planning objectives. Do you have a loved one with special needs? Do you wish to preserve your family’s wealth and provide for future generations? Choosing the right kind of trust that aligns with your goals is important.
How trusts work
Usually, there are three parties involved in a trust:
- The grantor, or the person who creates the trust
- The trustee, who is responsible for managing the trust assets
- The beneficiaries, who will benefit from the trust proceeds
By creating a trust, you essentially hand over the management and ownership of your assets to the trust, which is legally a separate entity distinct from the grantor or beneficiaries. Therefore, since the beneficiaries do not legally own trust assets, they can neither sell nor transfer them to third parties. Additionally, creditors cannot repossess assets held in the trust to recover debts owed by a beneficiary.
Explore all your options when making your estate plans
The future of your estate and loved ones rests primarily on the estate planning decisions you make today. It is why you should not rush through this crucial process.
Understanding your options when crafting your estate plans will help you come up with a solid arrangement that will safeguard your kin’s interests. You will also rest easy knowing you have everything in place and there are no loose ends in your estate plans that may risk your loved one’s well-being.