Trusts

A trust is a legal entity under which one person — the “trustee” — holds legal title to property for the benefit of others — the “beneficiaries”.  The trustee must follow the rules provided in the trust instrument.  All trusts are either “inter vivos”, created during the settlor’s life, or “testamentary”, established at death through a person’s will.

Arevocable” trust is one that may be changed or rescinded by the person who created it.  A revocable trust funded during life avoids probate.  A revocable trust funded at death provides a plan for disposition of both probate and non-probate assets.  You can be the trustee of a revocable trust and name a successor trustee who will assume ownership of all trust assets upon your death.

A “pour-over trust” is a revocable living trust that receives assets for disposition from either the settlor’s will or by beneficiary designations from non-probate assets such as life insurance and retirement benefits.

An “irrevocable” trust is one that essentially cannot be changed after it has been created.

Trusts are often used for tax planning, to provide for someone with expertise to manage assets, or to shelter assets to protect them from creditors or for long-term care planning.

 

 

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