A Trust Agreement or Living Trust is a legal, written agreement that creates a new entity similar to a corporation. This new entity can own, hold, sell and otherwise transfer property just like a living person. One benefit of the Trust is that it continues “living” even after its creators (trustors) pass away. The next person chosen to be in charge of the Trust (successor trustee) will automatically take charge and continue to administer the Trust according to its trustors’ desired terms.
The trustor generally retains total control over the trust estate during his or her lifetime. Then, upon the truster’s death, the successor trustee of a Trust is automatically given the authority to administer the trust estate. Therefore, a probate is not necessary. This is particularly beneficial if the trustor owns property in more than one state, as it will avoid the need for a probate in each state. This distinguishes a Trust from a Last Will and Testament as a Will must be probated in order to become effective.
A Trust can be revokable, meaning the trustor can alter and amend the terms as he or she sees fit, or a Trust can be irrevocable, meaning the Trust terms cannot be altered after it is executed and funded. There are certain benefits making an irrevocable Trust desirable in certain estate planning situations.
Anyone that owns titled property, such as a home, land, vehicle, or a bank account or other financial accounts can benefit from a Trust. It is the best way to avoid the cost of probate, avoid paying certain taxes, and ensure your property and assets are distributed according to your desires after you die. Also, if you have a child with special needs a Trust can ensure your child receives financial assistance throughout his or her life while still qualifying for Medicaid.
There are many more unique features and aspects of a Trust that can assure your assets are preserved and distributed according to your desires. The attorneys at Slemboski & Tobler have a combined 35 years of experience drafting Trust Agreements for all sizes and types of estates. Contact us to discuss your estate planning needs and whether you could benefit from a Trust.