What is a trust?
A trust is a mechanism commonly used in estate planning that allows a grantor to select a trustee - a person or organization chosen to oversee the agreement - to manage the distribution of property and transfer benefits that appeases a beneficiary. Created to supplement or replace a will, trusts have become a popular alternative for those seeking qualities that wills do not provide, like privacy, and complete control of inheritances. They have also increased in popularity due to the fact that they can be organized and arranged in any way that fits a grantor's needs.
The following example exemplifies the relationship between all the parties included in a trust:
Steven (the grantor) wants to set up a trust that will provide his grandchildren with funds for a college education. He decides to entrust the bank (the trustee) with the responsibility of managing the money and distributing funds the way he dictates. The children are the beneficiaries, and will only be able to spend the money the way Steven intended. In this case, it can only be used for school.
Trust Benefits in Nevada
There are many benefits involved in creating a trust. Some of the most common elements that attract people to this tool are:
You have complete control over your wealth
Those who set up trusts have the ability to specify the terms and agreements exactly the way they want. Grantors choose who receives distributions and just how much they receive, and these terms will still exist even after death. The scenario above is an example of how people can set up funds or property to only be used in certain circumstances.
You have privacy
Individuals concerned with the privacy of their estate may also choose to create a trust. As trusts do not go through probate, all matters and properties in these agreements will not be made available to the public, when the grantor dies.
In addition to control and privacy, there are other benefits to having a trust. These benefits include:
- The reduction of estate taxes
- Reduced court fees
- Takes less time to distribute property and benefits
Types of Trusts
Trust agreements usually fall into two categories: testamentary trusts and living trusts.
This type of trust comes into effect when a grantor dies. Since a trust allows a grantor to specify payment or payments that could be used or provided throughout a period of time, many people opt to include a testamentary trust within their will.
These types of trusts are initiated during the life of the grantor, but they could still exist long after the grantor passes on. Those who create living trusts are free to change terms or any other elements of an agreement from the moment it is commenced. These trusts are usually coupled with wills to supplement them.
Experienced Nevada Trust Attorneys
There are many things to consider when deciding whether or not to create a trust. An experienced estate planning attorney can help walk you through the benefits and drawbacks of using a trust and help you determine what estate planning tool is best for you. Contact the Jacks Law Group for a free consultation.