Trust Based Estate Plans

The trust is the most popular, easiest to use, most flexible estate planning tool in our toolkit.  A trust allows you to avoid probate, minimize estate tax (if necessary), and control the use and distribution of your assets.

In general terms, a trust is a legal entity (somewhat similar to a company or corporation) that exists independently of any individual, but that exists for the purpose of benefiting some person or class of persons.  It is managed by someone called a trustee, who uses the assets of the trust according to the instructions he receives from the creator of the trust.

In the context of estate planning, you will establish what is called a “testamentary” or “living” trust.  You name yourself as the creator, trustee, and beneficiary of the trust.  The trust is basically dormant while you are alive, but when you die, a new trustee (chosen by you) takes over, and the trust then begins to manage your assets according to your wishes, avoiding probate.  The named successor trustee can also step in to manage your assets on your behalf if you become incapacitated, avoiding the need for a potentially costly conservatorship proceeding.  Trusts are also helpful in minimizing estate taxes for large estates.

With the flexibility a trust, you can simply distribute assets, or you can make just about any other sort of arrangement you desire.  For example, you can direct the trustee to invest the money and give the income to your children, giving them a guaranteed income.  This sort of arrangement is often used to provide for special needs children.  Or you can direct that the income from the trust is to be used to assist your descendants with college expenses.  A trust is also helpful for managing financial support for minor children.

For all these reasons, the trust has become the gold-standard in estate planning.  Our trust based estate plans include a living trust, a pour-over will, a medical directive, and a general, durable power of attorney.

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