Naperville Estate Planning Attorney on the Basics: What Is a Trust?

trusts, Naperville estate planning attorneyThere are many ways to prepare an estate plan, and what is right for one person may not be the best plan for someone else. As you look toward the future, you need to develop a plan that is customized to meet your needs, but you may not even know where to begin. For example, do you know the difference between will and a trust? If not, you are not alone.

In my practice as an estate planning attorney, I have worked with hundreds of clients who started the process without any advance knowledge of the various tools and techniques available to them. I take pride in educating my clients and helping them find the right solutions for their estate planning goals.

Wills and Trusts

Most people are familiar with the concept of a will. A will is one of the most commonly used estate planning tools and it may contain provisions for property, debts, and minor children that will take effect upon the death of the will’s creator—also known as the testator.

A trust, by comparison, is an arrangement that can be used to place assets under the control of a trustee. The assets in a trust will later be distributed to beneficiaries in accordance with the terms of the trust.

Types of Trusts

There are two basic types of trusts, and either or both may be used for estate planning purposes. Living trusts place assets into the trust while the creator of the trust is still alive. The creator, in most cases, will remain a trustee during his or her lifetime allowing for full control over the assets in the trust. A living trust can usually be amended or revoked at any time during the creator’s life.

The second type of trust is a testamentary trust. A testamentary trust is similar to a will in that the trust becomes effective and assets are transferred into the trust upon the death of the trust’s creator.

Reasons to Consider a Trust?

A revocable living trust is probably the common form of trust used in estate planning and it offers a number of benefits. Unlike a will, a trust can be set up to take effect immediately, reducing confusion and uncertainty. Assets in a trust are also generally exempt from the probate process, meaning your beneficiaries could receive their inheritances much faster and at less expense than by transferring assets in a will. Finally, trusts are also more confidential than wills. A will is a document that becomes a matter of public record while a trust may be kept private in most cases.

Questions About Trusts?

If you would like to learn more about trusts and how they can be used effectively in your estate plan, contact an experienced Naperville estate planning attorney. With more than 30 years of experience, Attorney Denice Gierach is ready to provide the guidance you need. Call 630-756-1160 today.

 

Sources:

Investopedia

The Balance