Do I need a will or a trust? How do I know what I need?
Once you start to become established in life, acquire some possessions, and possibly even start a family, you should begin thinking about creating your estate plan. This can give you peace of mind knowing there is a nest egg to help provide for your loved ones after you pass away. But transferring assets to your family members after you pass away through your last will and testament may not be the most efficient way. Depending on your circumstances and needs, it may serve you well to transfer some or all of your estate through carefully planned trusts. An Arizona estate planning attorney can help you determine the most efficient way to use trusts in your estate plan.
What are Trusts?
A trust is an instrument used to transfer assets from the person who creates the trust, or the trustor, to one or more beneficiaries. The trustor is also commonly referred to as a grantor or settlor. Once the trustor has deposited assets into the trust, it will go under the control of the trustee. The trustee will manage the trust, keeping it maintained and profitable, until the time comes for the trust to transfer to the beneficiary. The trustor can be the trustee of the trust, or someone else can fulfill those responsibilities. The trust can transfer upon the trustor’s death, or when a different condition is met.
There are several types of assets that you can consider contributing to a trust. The simplest way to fund a trust is with the funds from your bank account, but you aren’t limited to just cash. Real property, or real estate, such as houses and land can be used to fund a trust. Business interests and assets can also be contributed to a trust. You can contribute your valuable possessions, antiques, collectibles, and other keepsakes to your trust. Investments like stocks and bonds can also be used to contribute to a trust. You can also use certain life insurance policies to fund a trust.