Trusts

There are many different types of trusts which can be used for a variety of purposes. The most common is a revocable trust which is created by an individual or couple (the Grantor). Real and personal property is transferred to the trust and held for the benefit of the trust beneficiaries. Usually the Grantor is also the Trustee who manages the property in the trust. While the Grantor/Trustee is living and capable of managing business affairs, he or she may do anything with the property and when the Grantor/Trustee is no longer capable of managing business matters, the successor Trustee manages the property. A trustee has a fiduciary responsibility to act for the benefit of the trust beneficiaries. At the death of the Grantor, the property may remain in the trust and continue to be managed by a Trustee, or it may be distributed to the beneficiaries. The most useful aspect of a trust is that it can avoid the probate process and provide for distribution of the property that the Grantor has accumulated over the years as the Grantor directs. An example would be that through the trust, property can be used to provide for the financial security of a spouse during his or her lifetime and distribution to Grantor's children upon the death of the spouse. The terms of each trust will vary according to the wishes of the Grantor and can be quite simple or quite involved depending on the situation.

The most common trusts are revocable, meaning they can be changed at any time by the Grantor. An irrevocable trust is one that may not be changed and would be used for special purposes such as tax planning asset protection, children with special needs, or providing for a grandchild's education. Property that is distributed to a beneficiary from a trust at the death of the Grantor does so without the need for probate or the supervision of the Probate Court.

Trusts are not just for the wealthy. They are a useful tool for managing property during one's lifetime, as well as transferring property at death. After consultation with you, the attorneys in our Estate Planning practice group can determine what type of trust is appropriate for you and your family and can guide you through the process of creating an estate plan that includes a trust.