A Trust is an important and well recognized part of Estate Planning. It is used to hold legal title to property for the benefit of one or more persons. The parties involved in a trust are:
- Grantor, or Trust Creator: the person creating the Trust.
- Trustee: the person or institution hodling the legal title to the property.
- Beneficiary/Beneficiaries: The person or persons intended to benefit from the Trust.
A Trust, if properly drawn and "funded", can be helpful in many situations. A few examples include:
Avoiding a conservatorship.
If the Grantor becomes disabled and his/her property is held in a Trust, a successor Trustee can step in and take over management, without the delay and expense of going to court to appoint a "conservator".
Avoiding probate .
A properly drawn Trust is a separate entity that does not die when the creator dies. The successor Trustee can take over management of the Trust estate and pay bills and taxes, and promptly distribute the Trust assets to the beneficiaries, without court supervision (as long as the Trust agreement gives the Trustee that power).
Trusts, unlike Wills , are generally private documents. Your neighbors and the public would be able to see and how much you had and who your beneficiaries were under a Will, but usually not with a Trust.