Estate Planning 101: What You Need to Know About Trusts
It doesn’t matter whether you’re the wealthiest man in the world or someone with more modest means; establishing a trust is the best way to ensure that your wishes will be carried out when the inevitable comes. But first, we need to define precisely what a trust is.
What is a Trust?
A trust is a legal document allowing a person or organization (the trustor) to transfer ownership of property or assets to another person or organization (the trustee) to hold and manage the property on behalf of a third party (the beneficiary). The trustor can designate the trustee to manage the trust for the beneficiary’s benefit following the trustor’s wishes. The trustor can also specify how the trust property is to be used, or the trustor can give the trustee the sole discretion to use the trust property in the beneficiary’s best interests.
With the guidance of an estate planning lawyer, trusts can be created during the trustor’s lifetime or upon the trustor’s death. If a trustor creates a trust while they are still alive, they can change or revoke it in their lifetime. Upon the trustor’s death, the trust becomes irrevocable, meaning it cannot be changed or revoked.
When establishing a trust, the trustor must decide who will be the trustee, who will be the beneficiary, and what the terms of the trust will be. The trustor should also consider the tax implications of the trust and the laws governing trust administration in the state where the trust is established.
Why Would You Want to Establish a Trust?
Trusts are a great way to protect assets, ensure wishes are carried out and minimize taxes. A trust can provide for the care of a disabled or elderly family member, ensure that assets are distributed as desired, and protect assets from creditors. Trusts can also be used to provide for children or grandchildren, give money to charities, or minimize the tax burden of an estate.
Trusts can be set up to provide a lifetime of income for a beneficiary, protect assets from creditors, avoid probate, or provide for a minor’s future needs. Trusts can also be used to provide for long-term care or medical expenses, for the care of pets, or for the special needs of a family member. Trusts can also protect assets from lawsuits, ensure that assets are distributed as desired, and protect assets from creditors.
How Do You Create a Trust?
The first thing to do when establishing a trust is to contact a will and trust attorney in Colorado. Lawyers specializing in trusts and wills will have the necessary experience and expertise to assist you in planning your estate. Once you have found an estate lawyer you can trust, you can name your trustee, draft the document, fund the trust, designate your beneficiaries, and sign and file the trust document.
Creating a trust is a great way to distribute your assets according to your wishes after you are gone. Consult an experienced estate planning lawyer to take care of all legal requirements and ensure that the trust is set up according to your wishes. With guidance and planning, you can protect your estate and take care of your beneficiaries to the best of your abilities, even when you’re no longer around.
You can leave your estate’s future in the experienced and reputable hands of Estate Planning Lawyers Colorado. We make sure that your estate and benefactors are taken care of the way you would, even if you’re no longer around. Contact us today for a free planning analysis consultation.