Welcome back to another week of estate planning knowledge!
We kicked off our discussion last week with Wills. Aside from a Will, there is another POWERFUL legal document that can protect your assets and even save taxes.
This vehicle is known as a TRUST! With that being said, let’s give you an introduction!
Let’s talk about some key terminology:
Grantor/Trustor: An individual that gifts away assets.
Trustee: A trustee is a person or firm that holds and administers property or assets for the benefit of another party.
Beneficiary: A person who receives assets from a Trust.
What is a Trust?
Now that we have the terminology cleared out, let’s talk about the purpose of a Trust. Unlike a Will, a Trust avoids probate.
Remember that probate is the legal process of validating a Will. Having a Trust skips probate entirely – it is a concrete agreement that specifies the terms and distribution of assets. Avoiding probate saves time and costs associated with court fees.
Trusts can be protected from creditors and is not public record, unlike probate.
There is so much more to talk about with Trusts, but we will leave you with this as a starter!