TRUSTS ATTORNEY IN WESTERVILLE, OHIO
Defining Trusts and when they can be used
A Trust is an estate planning tool that can potentially minimize estate costs and distribute property to beneficiaries outside of probate court, as a private transaction. Under Trust distributions of property, a third party, called a Trustee, holds assets for beneficiaries. The Trustee is responsible for distributing assets to the beneficiaries according to the directions in the trust.
Benefits of Trusts:
Some Trusts are not subject to probate court. For these Trusts, the Trust beneficiaries are able to receive the assets quicker, cheaper and more privately than through a Will. The advantages of these Trusts include:
Fewer court fees, and reduced expenses.
In some cases with proper planning, where estate taxes are assessed, reduced estate taxes.
Management of life needs if there is an incompetency of a beneficiary and distribution to beneficiaries at the end of life.
Professional management to protect the estate from financial mismanagement by the beneficiaries or from their creditors.
Private proceedings if the Trust is not subject to probate.
Types of Trusts:
There are a number of different types of trusts that can be structured to serve a variety of purposes. The two primary distinctions involve revocable and irrevocable trusts.
A Revocable Trust is also sometimes referred to as a Living Trust or an ‘Intervivos Trust’. The grantor(s) usually retain control over the trust assets during their lifetimes. They can dissolve the Trust at any time if their circumstances or wishes change, or sell and control all the assets during their life if they are competent. The grantor is typically named the Trustee, but provision is made for a Successor Trustee in the event of death or incapacity. The assets of a Revocable Trust may pass without probate if the Trust owns the assets or they are outside of the probate court’s assets. A Revocable Trust normally is considered irrevocable upon the death of the grantor.
An Irrevocable Trust transfers the assets out of the grantor’s estate during their lifetime. This can be beneficial if the grantor’s goal is to reduce potential estate taxes and to limit tax liability on income generated by trust assets during their lifetime. An Irrevocable Trust may also protect estate assets in the event of a legal judgment against the grantor or a beneficiary. The grantor loses control of the assets once the Irrevocable Trust is established subject to some exceptions, and the Trust cannot be altered or dissolved.
State laws and personal goals help determine which type of Trust is most appropriate for a given situation. Anyone seeking to establish a Trust should speak with an attorney with estate planning experience to discuss their options. Please feel free to contact The Law Office of David G. Bale today if you have any questions about whether this option is right for you and your family!