Creating a trust can be important for people who are putting together their estate plan. Trusts can help you avoid the probate process, while also securing your assets and property for your beneficiaries. But what are some of the things you need to know about creating a trust?
One of the most common types of trust is the living trust, and what this means is that you establish the trust while you are alive, as opposed to a trust that is created upon the individual's death. If you are the one creating the trust, then you are the "grantor." When you pass the assets and property to your trust, the "trustee" will be in charge of, and must manage, the trust. The person who ultimately benefits from your trust is the "beneficiary."
When you create your trust, it will be bound by local laws and the trustee will be bound not only to those laws, but the provisions and terms of the trust. A deed will be created when the trust is created, called a "declaration of trust." If the trustee is negligent in his or her duties, they can be held responsible for their actions.
The biggest benefit to having a living trust is the ability to transfer assets and property to the trust, thus protecting them from the probate process. Probate can be costly and time-consuming, so avoiding this process is a major goal for many people putting together their estate plans for the first time.
Source: FindLaw, "Living Trust Information," Accessed March 24, 2016