What is a Trust?
When looking at your estate planning options, one of those is a Trust. It's important to review what a Trust is and how it can be useful in estate planning.
When you create a Trust, you create a separate legal entity that "owns" all of the property you title in the name of the Trust. You must separately title that property into the name of the Trust, including any property, financial accounts or investments, if you intend those assets to be controlled by the Trust. A Trust is usually revocable, which means it can be changed while the Trust owner(s) is/are alive.
A trust usually becomes irrevocable after the death of the owner of the Trust and a "Successor Trustee" becomes the manager of the Trust and must then distribute the assets of the Trust pursuant to the terms of the Trust documents.
A Trust can be used to control your assets after you pass. This is most common in the context of having minor children or young adult children. Minor children cannot access inherited money without a great deal of hassle, so it can be a good idea to create a Trust while your children are young that lays out what expenses the guardian for your children can receive from the Trust for their care.
A Trust can also be used to distribute assets upon certain milestones in a child's life, such as going to college, graduating, having a grandchild or getting married. You can make your wishes known through your Trust and award that behavior when and if it occurs.
It is a common misconception that a Trust "avoids probate". Even when a Trust is created, a "pour over will" is also executed, allowing any property that is not owned by the Trust to be placed under the control of the Trust.
Discuss with an attorney whether a Trust is appropriate for your estate situation. Attorney Allison Greenlee Korr can be reached at 269-381-4471