A trust is a legal agreement within your estate plan in which a person called the trustor, transfers property to a trustee. The trustee will hold the property in a trust for the benefit of your designated beneficiaries. A trust is usually a contract between the trustor and the trustee in which the trustee agrees to manage your property and distribute your assets pursuant to your trust’s terms. A trust account must have certain elements in the agreement in order to be valid. The five elements that is required for a valid trust is a trustor, a trustee, trust property, beneficiaries, and a purpose for the trust. A trust can be created for any lawful purpose as long as it doesn't violate any criminal or civil laws. A trust’s purpose needs to be clearly stated in the trust agreement.
What are the benefits to a trust?
Some common benefits of a trust are a trust helps to protect your estate. Protecting your estate is one of the common ways that a trust is used for. Another benefit of a trust is it can provide funding for educational needs for your children, grandchildren or any other relatives. You can set-up a trust and you can set aside funds in your trust for educational purposes, such as tuition and living expenses. One other benefit for a trust is this is one of the best ways to avoid probate. When you keep certain property out of your probate estate, you will be able to avoid the expenses and hassles that probate could bring to your trust. Finally, one last benefit of a trust could be that you get to put any conditions or rules on how you want your assets distributed out after you die. A trust can be both flexible and complex and that is why you should call Estate Planning Associates in order to find out what is the best course of action for your estate plan.