When we read or hear about someone setting up a trust fund we often assume that that person has an estate worth a vast sum of money or property. In fact, a trust is merely a legal way to manage the dispersion of funds, and is a practical approach for anyone concerned with protecting their assets today and in the future.
There are various reasons for establishing a trust fund and many different provisions that can be included, but there are some basics that apply to all trusts. The “grantor” of the trust is the person who contributes to the reserve and decides how it will be administered. The “beneficiary” is the individual or organization who will profit from the security of the trust. The “trustee” is in charge of seeing to it that the instructions laid down by the grantor and allowed by the laws of the state are carried out. The grantor may choose a person who he has confidence in to be the trustee or he can arrange for a financial institution to stand in.
There are many advantages to having a trust, depending on your specific goals. A trust can alleviate any misunderstandings or disputes about your intentions after your death. Family members may interpret your wishes differently. The terms defined in your trust will be the final word.
If you have a favorite charity that you would like to include as a beneficiary of your estate naming them in your trust will avoid them having to pay taxes. Establishing a trust is also a good way to protect your beneficiaries from the burden of inheritance taxes.
If you are a business owner, you can attach certain stipulations to your trust that will assure that your enterprise will continue to thrive under the management that you have put in charge. If you want a relative to benefit from the continued profits of the business without having a say in management changes, this can also be arranged.
Since there are so many variants involved with setting up a trust, be sure to get advice from an attorney experienced in estate planning. Call Parker Lawyers @ 303-841-9525 today.