What is a Trust in Estate Planning?

A trust is a legal arrangement where a trustee holds and manages assets for the benefit of designated beneficiaries. Trusts help in avoiding probate, protecting assets, and ensuring efficient distribution according to your wishes.

Types of Trusts

• Revocable Living Trust: Can be modified or revoked during the grantor’s lifetime.
• Irrevocable Trust: Cannot be changed once established, often used for tax and asset protection benefits.
• Testamentary Trust: Created through a will and becomes effective after the grantor’s death.

Common Family Scenario

One common case in estate planning is when a parent with multiple children passes away without a trust in place.

This often leads to disputes among siblings over asset distribution. In some cases, one child may feel entitled to more than the others, or disagreements may arise about selling the family home.

SPACE

By setting up a trust, the parent ensures that assets are distributed fairly and according to their wishes, preventing legal battles and family conflicts.

Frequently Asked Questions