You should have a trust fund. A trust holds assets, such as cash or property that are intended to provide benefit to an individual, group or organization. Trusts generally involve the following three members: (1) Grantor: This is the person(s) who established the trust and puts the money, stock, private business or other property into the trust. (2) Beneficiary: This is the person(s), group or organization that is intended to benefit from the trust. They do not own the trust property, but have the right to receive the benefit of the property as the trust allows. For example, a grandchild can receive distributions to pay for college. (3) Trustee: The trustee is responsible for managing the property owned by the trust. Think of trustees as the corporate officers. A trustee can be an individual or an organization, such as a bank or a law firm.
Types of Trust Funds
A trust fund can be categorized based on when it is created (living trust), if it can be modified (revocable trust), and the specific purpose of the trust (charitable remainder trust). Your state’s laws govern the types of trusts that are permitted, how trusts are created, as well as how trusts operate.
These are the types of trust funds that you can set up with the help of an estate planning lawyer. Irrevocable Trust: As the name suggests, once these trusts are created they generally can’t be changed. This form of trust is used by individuals concerned about estate taxes, or wanting to protect assets from future creditors. Revocable Trust: Also known as a living trust, this is a type of trust where the grantor places assets during their lifetime, which are then transferred to beneficiaries at the grantor’s death. Revocable trusts provide a quick way to distribute your assets outside of probate. Charitable Remainder Trust: This is designed to distribute assets to a specified charity at the end of the trust. Benefits include immediate tax credits to the donor/grantor and a fixed-percentage amount of income to the donor during the life of the trust.
Why You Must Fund Your Trust
Funding your trust is the process of transferring your assets into your trust’s name. You must fund your trust for it to have any power. If the property or funds aren’t properly transferred, the trust is useless after you die. The trust assets will go to probate to be distributed under your will or the intestate succession laws of your state.
There are two ways to fund your trust: while you are alive or after you have died. Funding your trust while you are alive ensures the process is handled according to your wishes. All titled property, such as real estate or stocks, need to have the title reflect the trust’s ownership.
A “pour over will” can be used to fund your trust after you die. The will “catches” any forgotten asset and sends it to your trust. The assets may still go through probate first and be exposed to creditor claims, but then it can be distributed according to the instructions in your trust.
Why You Need a Trust Fund
There are several advantages to creating a trust fund. Trusts remain private, so only the trustees and the beneficiaries know your wishes. A will becomes public record after you die. A trust can provide for distribution over a period of time. For example, a monthly living allowance can be provided until a child reaches a predetermined age. Trusts can cover property that a will cannot, such as life insurance policies and retirement plans. In some states, a trust can live on indefinitely. You can ensure your property is distributed under the conditions you set. For example, the remaining spouse can live in a family home until their death, and then the property will transfer to a named beneficiary. Trust funds can protect assets from your beneficiaries.
Trust Fund Lawyer Free Consultation
When you need a trust fund attorney, call Ascent Law for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506