Estate planning: What are the basics of a trust?

On Behalf of | Oct 31, 2019 | Estate Planning, Wills, Trusts & Probate |

Of all of the available options in estate planning, trusts are one of the most vexing components for many people.

So, what can a trust do? Well, for starters, it is important to clarify your own goals, then decide how to structure the trust to achieve those goals. For example, if you want to minimize your estate’s tax obligations, structure how your family members or other beneficiaries receive trust assets, or protect the interests of a loved one with disabilities, then creating a trust may be the best option.

To create a trust, the person who is creating the trust — this person is known as the “grantor,” “settlor” or “trustor,” in legal terms — transfers ownership of the assets in question to the trust, which is overseen by the trustee, who then controls the assets for the benefit of the designated “beneficiaries.”

Choosing the right trustee is crucial, as the trustee must abide by a fiduciary responsibility to the beneficiaries. That means the assets controled by the trustee must be managed properly and in accordance with the terms of the trust.

What we’ve described here are the basics of the creation and operation of a trust, but there are many different types of trusts to consider. Each financial and family situation is different. Those who would like to learn more about trusts and estate planning in general should speak with an experienced estate planning attorney.