A common misconception is that trusts are only for the wealthy. When trusts are used as part of a comprehensive estate plan, trusts can provide many benefits to your family and loved ones whether you are financially secure retiree, or a young family planning for the future.
Some common reasons our clients decide to set up a trust include:
- Providing for minor children or family members who are inexperienced or unable to handle financial matters
- Providing for management of personal assets should one become unable to do so
- Avoiding probate and immediately transferring assets to beneficiaries upon death
- Reducing estate taxes and providing assets to help pay for taxes
- Keeping your life private. The terms of a will are public while the terms of a trust are not, so privacy makes a trust an attractive option
In general terms, a trust is a legal agreement that has three parties to it: The Grantor who creates the trust, the Trustee who manages the property held by the trust as directed in the trust document, and the Beneficiary who receives the benefits of the assets that are being held by the trust.
The most common type of trust used in estate planning is the revocable living trust. With a revocable living trust you, or you and your spouse (if married) are the Grantors, Trustees and Beneficiaries of the trust during your lifetimes. The fact that the trust is revocable, refers to the fact that you can revoke or change the terms of the trust at any time while you are living. Once you are deceased the trust becomes irrevocable, meaning it can no longer be changed. A successor trustee of your choosing steps in after you are deceased, and administers and distributes the trust assets for the benefit your children and family as directed in your trust document.
In addition to revocable living trusts, the attorneys at Phillips Law Firm Inc. have significant experience establishing a variety of other types of trusts including:
- Irrevocable Life Insurance Trust (ILITs): An irrevocable trust which uses life insurance proceeds to avoid estate taxation
- NFA Gun Trusts: A specially designed revocable trust, which is established for the limited purpose of owning your firearms, with a specific focus on NFA Firearms.
- Ohio Asset Protection Trusts: A self-settled irrevocable trust that allows an individual to place the transferred property out of the reach of certain creditors, while still being allowed to receive the benefits of the transferred property.
We would be happy to discuss what kind of trust would be best for you.