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We are often asked the question, what is a trust and do I need one? While there several reasons to setup trusts the most prevalent is to avoid probate and make transferring property to beneficiaries easier and faster.

A simplified answer to what is a trust, is it is can be compared to a safe deposit box that holds valuable items. Individuals assign property rights over to the trust. Since property is no longer owned by the person it becomes exempt from probate.

One of the biggest misconceptions about trust funds is they are reserved for wealthy individuals. While there are certain kinds of trusts, such as irrevocable life insurance trusts (ILIT) which is used to offset estate and inheritance taxes, the bulk of trusts are available to people with ordinary means.

A revocable trust is a legal agreement that you create to safeguard your assets and pass them along to heirs when you die. Property is titled in the name of the trust and managed by a Trustee. In most cases, you will be the designated Trustee, but you can appoint someone else to manage the trust if desired.

When you create a revocable trust you will be identified as the Grantor. Whoever is charged with managing trust assets is identified as the Trustee. Upon death, the person that takes over trust management duties is the Successor Trustee.

The term 'revocable' means the document can be modified or terminated at any time. Modifications would occur if you wanted to name a different successor trustee or when property is added or deleted from the trust.

Setting up a child trust fund provides the opportunity for parents or grandparents to purchase stocks, bonds, mutual funds, and life insurance policies that can be transferred to minor children when they reach legal age.

Assets are placed into a child trust fund because minor aged children are not allowed to enter into contracts. The most common type of trust for children under 18 years of age is a custodial account.

Custodial accounts are governed under the Uniform Gift to Minors Act (UMGA) or the Uniform Transfer to Minors Act (UTMA). UGMA lets minors own securities while UTMA lets minors own other kinds of property including real estate.

A family trust is more commonly known as a living trust. This is a legal document that retains ownership of titled property and financial assets. The person setting up the trust has total control over assets while living and appoints a Trustee to settle the estate upon death.

Setting up a family trust requires individuals to fund the trust by transferring ownership of assets. This is accomplished by acquiring new property titles for real estate and vehicles and changing names on bank accounts and financial assets.

The person that sets up the trust is referred to as the Grantor. This person is oftentimes also the Trustee. However, Grantor's can appoint someone else to oversee the trust and assume control over their assets if they want.

Preparing a Will and Testament is one of the best final acts a person can do for their family. Any time someone passes away without writing a Will their relatives have to make decisions they usually aren't prepared for.

Writing a Will and Testament isn't a difficult process and offers many benefits. First of all, the last Will lets a person have a final say in how their property is distributed. Without one, a probate judge has to abide by state law which requires property to be given to the surviving spouse or direct lineage heirs.

Secondly, the Will is needed to designate a probate personal representative to reconcile the estate. This position can be filled by anyone that is of legal age and never convicted of a felony offense. Personal representatives are responsible for all aspects of closing the estate.

A lot of people setup a living trust to avoid the probate process. This type of estate planning method involves transferring ownership of possessions to the trust which is managed by a Trustee.

The Trustee of a living trust is the person who owns the property. They are also referred to as the Grantor. Transferring property to the trust is referred to as 'funding' and involves re-titling property into the name of the trust. The process is fairly simple to do with brokerage and bank accounts, but requires a little more effort with real estate and motor vehicles.

The biggest mistake people make when setting up a revocable living trust is failing to re-title their property. Property does not become part of the trust until it is legally titled. Failing to re-title property can result in the property having to pass through probate and being distributed to rightful heirs according to state law.

Executing a last Will is one of the most important aspects of estate planning. This document is used to designate an estate agent to settle your estate upon death. It allows you to gift inheritance to relatives, friends, and charities and arrange legal guardianship for your children.

In simple terms, the last Will is needed to tie up loose ends. It supplies directions to estate agents about strategies that were implemented, such as setting up trusts or assignment of beneficiaries, and declare who is entitled to specific possessions or inheritance cash.

Taking time to write a Will is one of the best things you can do for your family. The process isn't difficult, nor does it require much time. Most people find it easiest to hire an estate attorney, especially if they own titled property, investment or retirement accounts, or have children under age 18.

Trusts are used to safeguard estate assets and reduce estate and inheritance taxes. Most people find the process somewhat confusing because there are different kinds of trusts and methods for setting them up. Some of the most common include: revocable, irrevocable, living, and testamentary trusts.

Essentially, trusts are used to secure property that is intended to benefit other people. While there are many kinds of trusts, each includes similar elements. Each involves the person creating the trust, the person managing the trust, and the people that benefit from the trust.

The individual that sets up the trust and is the owner of estate possessions is known as the Trustor. This person is also referenced by different names such as Donor, Settler, and Grantor. These terms vary by location, but always refer to the person making the trust.