A few definitions are in order. There are two kinds of trusts: a living trust, which is created during the lifetime of the settlor (the person who creates the trust) through a separate trust document and a testamentary or after-death trust, which is created through the testator's Will.
After the trust is created, the settlor funds the trust by transferring assets and property from the settlor to the trust. The person who manages the trust is called the trustee. The trustee is responsible for administering the property in the trust in accordance with the settlor's wishes. A living trust can be revocable or irrevocable. In other words, the settlor can revoke or cancel the trust during the settlor's lifetime. If the settlor revokes the trust, the property in the trust goes back to the settlor.
That said, a trust is not an appropriate estate planning vehicle for most people. Unless you have excessive wealth, unique property (I am thinking of Prince's music – both released and unreleased), or a special situation, I trust is probably not appropriate for you and will needlessly complicate your estate plan. However, a trust may be appropriate if you have minor children, have minor or adult children with diminished capacity who cannot handle their own financial affairs, have a lot of property that you want to give to charity, need to reduce your taxable estate, or want to fund your estate with life insurance.
There are other reasons to have a trust, and the best way to determine if a trust is right for you is to meet with an estate planning attorney. However, for most people, an estate plan consisting of a will, a health care directive, and a power of attorney is more appropriate than a trust.
The best way to determine what is right for you is to meet with an estate planning attorney. To that end, I invite you to give me a call at 763-450-9494 to discuss your specific situation. Everybody who calls gets a free 5 minute mini telephone consultation. An in person meeting is $250, and that amount is credited to your account when you retained me to represent you in drafting your Will, healthcare advance directive, power of attorney, and other estate planning documents.
WARNING: The information contained in this article does not constitute legal advice and may not be applicable to your situation. Tim is licensed to practice law only in the state and federal courts of Minnesota, and the advice that he gives is applicable to that jurisdiction only. Further, reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C. You should always discuss your situation with an attorney before taking any action based on what you may read in this blog. To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.