Trusts are frequently used in combination with Last Will and Testaments. The laws for creating Trusts also have a long history dating back to 12th century England. The English Common Law still informs our concept of Trusts today. In essence, the concept of a Trust is that property may be held in ownership by an entity (“In Trust”) other than ourselves. A Trust is created by a Declaration of Trust that meets the legal requirements as to form and content and that has a Trustee to manage the Trust properties for which there are specific instructions and purposes. A Trust can be created in many ways to meet many kinds of goals. It is a tool that is frequently helpful for Estate Planning. A Trust can be useful both during your lifetime and also after your passing.
In Estate Planning, Trusts are often used for purposes such as:
Revocable and Irrevocable Trusts
IA Trust is a self-created entity that can hold property and provides through its terms for the management of its property during the term or length of time of the Trust. A Trust may be revocable, meaning it may be revoked (ended) during, for example, a person’s life time. Revocation must be sought in accordance with the terms of the Trust. A Trust may also be created so that it is irrevocable. A Trust acts as an entity that manages assets for the purposes set forth in the Trust by the Settlor (the Settlor is a name used in a Trust for the person who created the Trust). Trusts are flexible and can be set up for many kinds of purposes.
Trusts for Minors
Creating Trusts to provide for minors upon the passing of one or more of their parents is common. Parents can use a Trust to manage, distribute, and hold assets for minors who have inherited monies but are too young to manage these assets. Frequently trusts are created in a Last Will and Testament, but they can also be created independently from a Will. In either case, trusts will designate one or more Trustees to manage, provide for, protect, and preserve assets that are given to a minor until the minor attains an age when they can assume ownership responsibly.
Depending on a married couple’s level of financial assets, Trusts are a fairly a common tool used by some married couples to ensure that assets are put together in a way allowing easy administration in the event that one or both may become disabled or impaired. In some cases, Marital Trusts may be beneficial in structuring assets to help with taxation concerns. Trusts can also provide peace of mind in marriage given that the trust may provide for predictable asset management. Couples use Trusts in various ways, depending on their goals, including individual Trusts and joint Marital Trusts.
A Pet Trust is a Trust with assets set aside to provide for the care of animals after the passing (or hospitalization/incapacity) of the animal’s owner. Trusts of this nature may have someone identified to take the animal, and the Trust's assets are then disbursed to take care of the pet’s needs including food, housing, medical treatment, and care. A Pet Trust can be a useful tool to ensure that your friends or family who agree to take care of your pets do incur a burden heavy financial burden. For example, there may be heavy medical expenses for an elder for pet that would cause them financial distress or harm. A Pet Trust is a caring way to take care of both your animals and the people who adopt them when you are gone.