As you prepare for your estate planning procedures, you’ll know about creating a will of course, but one additional and often-overlooked tool for your financial future involves creating a trust, used to distribute your property as well as perform other tasks. Here is some basic information on this vital estate planning process, as well as a better understanding of the different types and essential parties.
Consider the Types: There are many different types of trusts which have different purposes, depending on what you want them to do. Overall, they work with you to manage your estate and distribute your assets, both at end of life and earlier. They can be used to protect your vulnerable beneficiaries, such as not giving an enormous sum to a young person all at once when they could be taken advantage of by an untrustworthy party, but rather to distribute over a period of time. It can be used to dictate how the funds can be conditionally used, such as setting aside a sum of money for a college or other educational fund.
Creating a Trust. As you begin to create a trust, you will need to work with a trustee, who will manage your assets for your beneficiary. This creates a special relationship between the two parties, known as a fiduciary duty. The trustee is liable in their responsibility and can be sued if they do not strictly follow the stipulations of the trust. Choosing the correct trustee is vital in ensuring that your wishes are followed, and it should be someone whose reliability you can count on. This does not necessarily need to stem from a personal relationship, and banks or attorneys can serve as excellent and well-informed trustees for your estate planning. This position is regularly compensated for their efforts.
Essential Parties: Throughout the process, there are three major parties involved: yourself (the trustor), the trustee (explained above), and the beneficiary to whom your assets will be going. Additionally, an attorney is an important part of this and any other major financial proceeding. The trustee manages the asset for the beneficiary and is one of the most important players in this financial arrangement.
If you are looking into your continued estate planning, you’ll want to work with an experienced legal representation throughout the process to ensure your overall satisfaction. At the Law Office of Smith & Horowitz, you can rest assured that your finances and properties are in good hands as we work with you in all of your estate planning needs. For a free phone consultation on our services, give us a call today at (215) 515-8464. You’ll be glad you reached out to us in your time of need!