Do you need to create a trust?

Do you need to create a trust?

On Behalf of | Feb 11, 2019 | Wills And Trusts |

If you choose to leave your instructions for the distribution of your assets in a last will and testament, some of those assets may have to be sold in order to pay debts and taxes during the probate process. However, you may be able to pass them to your beneficiaries without diminishing any of the value by placing the assets in a trust.

The American Bar Association explains that a trust is an entity that is separate from you. After you create it, you transfer the ownership of your assets to the trust. You can name yourself as the trustee and manage the assets throughout your life as if they are still your own, but when you die, rather than go through probate, the assets go directly to your beneficiaries according to your instructions.

The assets may stay in the trust after your death. If you are setting up a trust with the intent of providing for minor children or a child with special n, you may designate a trustee to manage the assets after your death rather than distributing them right away. For example, the trustee may take care of investments or properties and distribute the interest on these to your beneficiaries or use the interest to pay for living expenses, medical and care costs, education and more.

The trustee could be a friend or family member, a professional such as a financial advisor or attorney, or an institution such as a bank. This information is a general overview and should not be interpreted as legal advice.