What is a Trust?
A trust is a flexible financial planning tool that holds the assets of an individual (the settlor or grantor) for the benefit of one or more beneficiaries. The grantor names a trustee, and possibly a co-trustee, to manage during their lifetime and distribute, at death, the trust's assets according to the grantor's wishes. An institution that provides professional trust management services is often chosen as either a trustee or co-trustee.
Why Have a Trust?
Trusts are not solely an estate-planning tool for the very wealthiest people. As a part of any financial management strategy, a trust can benefit people with even modest assets. A trust can be tailored to protect your assets and give you greater financial peace of mind. Trusts can help you:
- Provide for a trusted professional to act on your behalf in the event of death or disability
- Ensure assets are conserved and not squandered by heirs after you or your spouse die
- Provide for your family's financial needs after your death
- Ensure privacy for your estate
- Eliminate probate fees on assets held in a living trust
- Reduce or eliminate estate taxes
- Expedite the distribution of assets to beneficiaries
- Ensure control and protection over payments and asset distribution to heirs with special needs either during your lifetime or when you die
Who Should Consider a Trust as Part of Their Financial Planning Strategy?
You may benefit from a trust if:
- You wish to leave your estate to your spouse and still make bequests to other beneficiaries after your spouse's death
- You want to provide for your current spouse, as well as any children from a previous marriage
- You are concerned about the possibility of periods of disability and want to ensure continuous management and protection of your assets
- You want increased control over the actual distribution of your assets after death, especially in providing for beneficiaries with special needs, such as disabled persons or beneficiaries unable to manage their inheritance