When you are creating an estate plan, you have probably heard about making a will that outlines where you want your property to go after you pass away. There is another option that you can use to complement the will. That option is a trust.
A trust is a legal arrangement that holds your assets for you in a way that makes them easy for your loved ones to get them when you pass away. While trusts are sometimes associated only with wealthy people, trusts are appropriate ways for parents with minor children to distribute assets. Trusts are also appropriate for people who don't want their loved ones to get stuck going through the Florida probate process.
When you establish a trust, you give another person or entity the responsibility of managing the trust. That person is called the trustee. You also name a beneficiary, which is the term used for the person who will get the assets of the trust. Because you name a trustee to handle the affairs of the trust, a trust can be a useful tool if the beneficiaries are minors or unable to care for themselves.
With a trust, you can set conditions for distributing the assets. An example of this would be distributing a specific percentage of the assets when the beneficiary reaches a milestone, such as graduating college or reaching a certain age.
There are various types of trusts for you to consider. Learning about the types of trusts and how they can help your estate plan is one step that you should take prior to setting up trusts as a way to help distribute your assets after you pass away.
Source: USA.gov, “Trusts” Sep. 13, 2014