If you find yourself scratching your head when you hear the term "trust," don't worry- you're not alone. Whether you're familiar with the concept or are just starting to explore, this blog will help you navigate the world of trust.
What Is A Trust?
A trust is a fiduciary agreement in which one party, known as the trustor, gives another party, known as the trustee, the right to hold title to property or assets for the benefit of a third party, known as the beneficiary.
How Do I Know If I Need a Trust?
There are several reasons that a trust may be beneficial.
Consider one if:
It is important to note that there are costs associated with creating a trust, often more than those of a will, which will vary based on the complexity of the trust.
Revocable or Irrevocable - What's Right For Me?
While there are many different types of trusts, they are each categorized as either revocable or irrevocable.
A revocable trust, sometimes called a living trust, can be changed anytime during your lifetime, should your circumstances change. In this type of trust, you can name yourself as the trustee and retain ownership of it during your lifetime, but can make adjustments as needed should you become incapable of managing your assets. Revocable trusts are subject to estate taxes.
An irrevocable trust works quite differently. In this form of trust, your assets are transferred from your estate and out of your control. You cannot make any changes to the terms of the trust, and it cannot be dissolved. Once this trust is created, your assets are no longer in your control. Typically, this type of trust is used to reduce estate taxes and liabilities from income made on the assets. Some irrevocable trusts can also protect you from legal judgments related to the assets.
What Are The Most Common Types Of Trusts?
While all trusts will be categorized as either revocable or irrevocable, there are a number of different types of trusts. A trust officer will be able to help you determine which type is best for you based on your unique financial situation. Some of the most common types of trusts are:
How a Trust Officer Can Guide You Towards the Right Trust
Selecting the right kind of trust depends on many factors. A trust officer will help you choose the most beneficial type of trust based on your goals, assets, and future wishes. A professional trust officer will be able to assist you in understanding your state's laws surrounding trusts and ensure you can make the best decision to secure your assets.
Contact our trust department today for a deeper dive and personalized guidance. We're here to assist you every step of the way!