What are Trusts and how are they used in estate planning

A trust is a common piece of an estate plan. It is an agreement that allows someone to hold assets on behalf of someone else. Trusts can be arranged in many different ways and it is up to the person drafting the will to decide which assets are placed in the trust. Many people think of trust for only people who are very wealthy. That is not the case, anyone can utilize a trust to ensure that their assets go to the beneficiaries that they name in the trust. A trust is a way for someone to manage how they leave money to their family members. In this way, you have control over who gets what and even when they receive those assets. There are many different types of assets that you can put into a trust such as: bonds and stock certificates; cash; houses; cars; life insurance and pretty much anything else that you want to leave to your family or friends. Once you put these assets in a trust, they are property of the trust and they are managed by the trustee. You get to appoint whoever you want as trustee, oftentimes it is a lawyer. The trustee is responsible for making sure that your assets are distributed the way that you want. 

Typically people leave assets in a trust for their spouse, their children, grandchildren and brothers and sisters. Some people may even elect to leave their assets to charity, which is also often done through a trust. You can set up a trust and decide when the beneficiaries will receive the assets. One of the more common examples of this is leaving money in a trust for your children for college funds and they get the funds when they turn a certain age. You can also have the assets dispersed on a periodic basis such as once a year during each year of college. 

If you are considering setting up an estate plan and leaving some of your assets in trust, you should reach out to an experienced estate planning attorney.