WHAT YOU NEED TO KNOW ABOUT TRUSTS
I have been told I should try and avoid probate, why is this, and how can this be accomplished?
An individual’s property can be inherited absent a probate process if their possessions are properly placed into a trust. This is desirable to many individuals, because probate can be a lengthy and costly process, whereas trust administration is often much faster and cheaper.
What are the individuals in a trust called?
The individual who creates the trust is called the trustor or settlor. A trustee is the individual the settlor names to carry out the terms of the trust. A settlor will often name themselves as initial trustee of the trust, and then name a secondary individual as trustee to take over after the trustor’s death. The trustee should be someone the settlor can trust and knows is responsible, honest, and organized. The beneficiaries are the individuals that the settlor names to inherit property under the trust.
Can I change my trust after it is created?
A trust can be set up in many different ways and can be either revocable or irrevocable during an individual’s lifetime. For a married couple, a trust can even be set up as revocable while both spouses are living, but become irrevocable after the death of either spouse.
What if I want to leave property to my children, but I am worried that they will blow through their inheritance if they inherit it too young?
A benefit of having a trust in place is the trust’s unique ability to not only designate who inherits what property, but also how and when the property is inherited. For example settlor can set up a trust to allow their children to inherit a portion of their property at age 18 and the remainder of their property at a later time, like when they reach the age of 30.
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