Establishing a trust as part of the estate planning process is a great way to save money for you and your beneficiaries. Trusts provide a range of protections including privacy, taxes, and especially protection from the probate process. However, a trust doesn’t just activate automatically without management. When creating an estate plan, include family members, trustees, and beneficiaries, so that they can also be educated on the process and maximize the benefits that come from a trust.
Trusts In A Nutshell
There are several types of trusts and each has its own advantages and applications, but the primary goal is to avoid involving the government in any way. The probate process is typically overseen by a court, and it ensures that the deceased person’s assets are distributed according to their will or, if there is no will, according to state law. This can be a time-consuming, emotional, and expensive process, which is why a trust is such a valuable estate planning tool.
The type of trust you choose to create will largely depend on your personal needs and goals, which should be discussed with an experienced estate planning attorney. Establishing a trust of any kind consists of a few basic steps:
- Choose the type of trust you want to create, and the trustee to manage the trust.
- Draft a trust document that specifies the terms of the trust. The document should include details about the trustee, the beneficiaries, the assets that will be placed in the trust, and how the assets will be managed and distributed.
- Transfer assets into the trust and fund the trust to ensure it can carry out its intended purpose
What To Do After the Grantor Passes Away
With appropriate estate planning, all documentation and assets should still function according to its terms after the grantor dies, or (in certain trusts) becomes incapacitated. Some trustees and beneficiaries may be surprised to find that after the grantor has passed away, the trust doesn’t automatically begin to distribute assets and manage itself. As the trustee or beneficiary, there are certain actions you must take in order to use the trust for its intended purpose.
First and foremost, all surviving parties should review the trust documents and assets with an estate planning attorney. An estate planning attorney can help bring clarity to the instructions and advise on the ways in which the trustee and beneficiaries should update their own estate plans. Some trusts are designed specifically to keep assets separate from certain beneficiary’s personal accounts in the event that they need to retain government assistance or to save on taxes. Meeting with a CPA and a financial advisor to discuss any changes to your financial situation as a result of being a trustee or beneficiary should also be a priority. Acting as a trustee is a huge responsibility, so it’s imperative that you seek guidance before carrying out your obligations.
At White Oak Wills, our mission is to help you protect what matters most to you and your family. Our experienced and professional team of attorneys is ready to help you design an estate plan that achieves all of your goals. If you have been tasked as a trustee, and have questions about how to manage or distribute the assets, contact our firm to schedule a consultation.
White Oak Wills & Trusts, LLC
