Frequently Asked Questions
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TRUST FAQ
A trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. You might need a trust for various reasons, such as asset protection, estate planning, minimizing taxes, and controlling the distribution of wealth.
While a will takes effect upon your death, a trust can be established during your lifetime and allows for the management and distribution of assets both during your lifetime and after your passing. Trusts also offer benefits like privacy, potential tax advantages, and avoiding probate.
There are various types of trusts, including revocable living trusts, irrevocable trusts, special needs trusts, charitable trusts, and more. Each type serves specific purposes based on your goals and objectives.
Yes, a properly structured trust can provide asset protection from creditors. By placing assets in an irrevocable trust, they can be shielded from potential creditor claims, lawsuits, or other financial obligations.
Trusts play a vital role in estate planning by allowing for the orderly transfer of assets to beneficiaries, minimizing estate taxes, avoiding probate, and providing ongoing financial management for beneficiaries.
The trustee should be someone trustworthy and competent in managing trust assets. Consider professional trustees, family members, or corporate trustees depending on the complexity of the trust and the expertise required.
Yes, depending on the type of trust and its purpose, there can be tax advantages such as reducing estate taxes, minimizing capital gains taxes, and providing income tax planning opportunities. Consult with tax professionals to understand the specific tax implications.
It depends on the type of trust. A revocable trust allows for modifications or revocation by the grantor during their lifetime. An irrevocable trust, once established, is typically more difficult to change or revoke without the consent of the beneficiaries.
Funding a trust involves transferring assets into the trust, which can include cash, investments, real estate, or other valuable property. It's important to work with an attorney or financial advisor to ensure proper documentation and legal formalities.
While a trust can address many aspects of estate planning, it's often recommended to have a pour-over will alongside a trust. The will serves as a safety net to transfer any assets not titled in the trust's name and allows them to "pour over" into the trust upon your passing.
