The basics of a trust can be of great help in estate planning.
The Motley Fool recently discussed some of the basics of the use of a trust in estate planning with its article “What Is a Trust Fund?”.
The benefits of a trust and the advice for using them can be found in many, many places on the Internet but a problem that often remains is that people may still not actually know what a trust is.
A classic trust is very simple. Person A (the grantor) creates a legal entity and gives it assets that are managed by Person B (the trustee) for the benefit of Person C (the beneficiary). Those are the three basic elements of every trust.
They can be complicated. For example, a trust can have multiple Persons A, B or C. In some types of trusts a single individual can play more than one role. Despite those complications, the basic structure of the trust does not change.
While there are many different types of trusts, including family, revocable, irrevocable, and many more, they all follow the same pattern. Trusts are a way to pass assets on to beneficiaries in a way through which those assets are independently managed by a trustee.
An estate planning attorney can guide you in the definition of a trust and how it is used in estate planning.
Reference: Motley Fool (Aug. 28, 2016) “What Is a Trust Fund?”