At Sumsion Business Law, we want you to be informed about our areas of practice before you schedule an appointment. Below, we give some brief background on trusts and trust formation. Please contact us for more information.
What is a trust?
A living trust is a fiduciary arrangement that allows for a third party (a trustee) to hold assets on behalf of beneficiaries. Trusts are generally used to avoid probate and minimize some taxes of an estate. Benefits of trusts include lower taxes, more control of wealth and more timely transfer of assets, and avoidance of probate. There are many types of trusts, but they are generally categorized into two categories: Revocable and Irrevocable.
Revocable trusts give the grantor control of the assets and are flexible during the life of the grantor. They can be amended and changed, and even dissolved at any time. Irrevocable Trusts are more concrete in that they cannot be amended. Each type of trust has its benefits and drawbacks. We recommend you consult with our attorneys to understand the benefits of each trust, and which would be best in line with your goals.
Who can form a trust?
Anyone can form a trust. Many believe that only high-net-worth individuals set up trusts, but this is a myth. If you have assets that you would like to see used responsibly, we recommend that you set up a trust.
Why should I form a trust?
Trusts allow you to have more control of your assets after you are gone. Trusts provide structure to the disbursement and use of wealth and protect you and other loved ones from the consequences of potential financial irresponsibility. Irrevocable trust funds also have tax benefits associated with them.
Can I change or alter my trust after its initial formation?
Certain types of trusts (generally those falling under the category of revocable trusts) can be amended during the lifetime of the grantor. If you are considering making changes to your trust, we recommend that you consult with one of our capable attorneys. If changes are not made correctly, the trust may need to go through probate before assets are distributed.
Contact us today to find out how we can help you ensure your trust is formed and/or amended correctly.