Assist clients to create trusts.
- A trust agreement is a document which describes the wishes of an individual for property held in trust for his beneficiaries. Common objectives for trusts are to reduce the estate tax liability, to protect property in an estate, and to avoid probate.
There are several types of trusts, the most popular is a revocable trust.
- A revocable trust is a legal document created by an individual (the grantor) during his lifetime. Just like a will, a trust states exactly what the person’s desires are with regard to his assets, dependents, and heirs. The big difference is that a will becomes effective only after a person dies and his will has been entered into probate. A trust bypasses the process of probate, enabling an individual’s successor trustee (who fills a similar role as an executor of a will) to carry out his instructions as documented in his trust at his death, and also if he is unable to manage his financial, healthcare, and legal affairs due to incapacity.
There are two types of trusts:
- Revocable trust: an individual transfers his assets into the ownership of the trust. He retains control of those assets as the trustee. He can change or revoke the trust at any time. The assets in the trust pass directly to his beneficiaries without going through probate upon his death.
- Irrevocable trust: allows an individual to permanently and irrevocably give away his assets during his lifetime. After he gives away these assets, he has relinquished all control and interest in these assets. Therefore, these assets are no longer considered part of his estate and aren’t subject to estate taxes.