Let’s start by defining what a trust is. A trust is a legal document that designates a third party (a trustee) to hold assets (real estate, vehicles, clothing, jewelry, and other personal belongings or title assets) on behalf of the beneficiary or beneficiaries. Trusts are arranged in many different ways and can be specific about how and when an asset passes to a beneficiary. Trusts are an excellent way to avoid a public and potentially lengthy probate process (the legal process by which the validity of a will is established); instead, your beneficiaries benefit from a private process and may gain access to their assets more quickly than they would with a will.
Example: Recently, I was hired to help a surviving child sell the mother’s property after her death. All of the surviving children thought the property was in the family trust.
Guess what—Mom had taken the property out of the trust for some reason, and when it came time to sell, because the property was not in the trust, the property had to be probated. This simple error involved hiring an attorney and going through Arizona Probate Court, which, in turn, created extra costs, extra time, and stress for the surviving children.
What type of trust? There are different types of trusts to consider prior to setting one up. What type of trust is best for you and your family would best be decided by a trusted attorney or financial advisor.
What are the Benefits of a Trust?
Control of Wealth: You have complete control over the terms of your trust, controlling when, where, and to whom your estate is passed on.
Protection of Legacy: A trust can help protect your estate from your beneficiaries, who may need more time to mature or develop wealth management knowledgeskills.
Privacy and Probate Savings: A trust allows estates to be passed outside of probate and remains private. It also reduces the amount lost to court fees and taxes.
Key Points: Trusts are powerful tools that can be used to manage assets and distribute wealth according to an individual’s wishes. A trust may help avoid probate, ensure that assets are transferred promptly and efficiently, and reduce or eliminate estate taxes.
There are many different types of trusts, each with unique advantages. Trusts can help individuals protect their legacy, maintain control over their wealth, and achieve their financial goals during their lifetime and beyond.
By taking the time to understand trusts and how they can be used, individuals can ensure that their wishes are carried out according to their desires.
If you have any questions about trusts, need a referral or information about buying and selling real estate, please feel free to contact Catherine Schaeffer at DanSco Real Estate Group at 480-650-3444.