Trusts Help You Meet Your Long-Term Goals
Everyone should have some kind of estate plan, including a will and a few other documents. Even if you do not have a lot of wealth or property to pass on, when you make important decisions in advance, you are making things much easier for your loved ones.
However, an estate plan can help you and your loved ones meet many objectives. A trust is a powerful estate planning tool that can be customized for many situations and needs.
Coodin & Overson, PLLP, is a Woodbury, Minnesota, law firm that helps individuals and families with a wide variety of issues in estate and probate law, including trusts. The firm’s experienced attorneys draft a wide variety of trusts for many different purposes, including preserving assets, protecting cherished property, providing for charities and ensuring care for vulnerable loved ones.
The firm has experience with:
- Testamentary trusts
- Living trusts
- Charitable trusts
- Special needs trusts
Put simply, a trust is a way of dividing ownership of property between a trustee and a beneficiary or beneficiaries. A trustee can be a lawyer, banker or other professional, or simply a trusted friend or family member. The person who establishes the trust chooses the beneficiaries. They may include family members, charities or others.
If you establish a testamentary trust, your trust goes into effect along with your will. Part of your estate becomes the principal of the trust, administered by the trustee, who has a legal duty to preserve the principal for the benefit of the beneficiaries.
At the time you establish the trust, you give the trustee instructions on how to distribute the assets in the principal. For example, a charitable testamentary trust might require the trustee to distribute the principal in the form of a college scholarship. A testamentary trust might also provide funds for family members without triggering taxes or other penalties they could face if their inheritance came in a lump sum.
A living trust goes into effect during the lifetime of the person who establishes it. If you set up a living trust, you name a trustee and name yourself as the beneficiary.
Wealthy people often use living trusts as a way of minimizing their tax exposure, but there are many other ways people of more modest means can use a living trust. For example, retired people can sometimes use a living trust to help pay for their own long-term care.