A trust is a legal entity that allows you to manage your assets in different ways. It is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.  It is not used just by wealthy people to avoid estate taxes but by people of various economic backgrounds who want to accomplish certain goals such as: pass assets to their children, protect assets, avoid probate, plan for disability, and maintain continuity of a business.

A trust can also enable you to control not only to whom your assets will be disbursed, but also how the money will be paid out — a crucial point if the beneficiary is a child or a family member whose ability to properly handle money is questionable or they could lose government benefits. Also, money can be directed for a specific purpose or time.

By creating a trust, you can:

  • Determine where your assets go and when your beneficiaries have access to them.
  • Protect your assets from creditors that you or your beneficiaries may have, or from loss through divorce settlements.
  • Direct where remaining assets should go in the event of a beneficiary’s death. This can be helpful in a family that includes second marriages and step-children.
  • Avoid a lengthy probate court process that can drag on for months or even years and become a public spectacle as well. With a trust, much of that delay can be avoided, and the entire process is private. Settling an estate through a traditional will may trigger the probate court process, in which a judge, not your children or other beneficiaries, has final say on who gets what.
  • Protect privacy by saving your beneficiaries from unwanted scrutiny or solicitation.
  • Have one person in control to manage all assets- If you have children who live out of state or don’t get along it is a good idea.  The Trust enables the trustee to be in charge rather than having every decision subject to approval of multiple persons and signatures.
  • Pass assets quickly.

There are many kinds of trusts such as: Living trusts, Testamentary trusts, Marital or A-B trusts, Credit Shelter Trusts, Hybrid Asset Protection Trusts, Special Needs Trusts, and Charitable Remainder Trusts.

  • Revocable Living Trusts are the most popular trusts created. A Living Trust allows you to place assets in a trust while you are alive, with control of the trust and transfers upon your death to beneficiaries that you have designated. You might consider creating a living trust for one of several reasons:
    • If you would like someone else to accept management responsibility for some or all of your property.
    • Avoidance of probate.
    • If you want financial affairs to be uninterrupted upon your death
    • If you have a business and want to ensure it operates smoothly with no interruption of income flow in the event of your death or disability.
    • If you want to protect your assets from the incompetency or incapacity of yourself or your beneficiaries.
    • If you wish to minimize the chance that your will may be contested.
    • Avoidance of ancillary probate in non-domiciliary states.
  • A/B marital trust can protect from future spouses and minimize estate taxes.
  • Special Needs Trust is a way to protect the assets of a special needs person and avoid being disqualified for public funding and benefits.
  • Individual Revocable Trust to protect separate property and/or integrate “Secure Act compliant” trust provisions.
  • Hybrid Asset Protection Trust to protect your wealth from creditors or legal claims and reduce taxes.
  • Veterans Asset Protection Trust to protect assets and become eligible for VA Pension benefits.
  • Irrevocable Trust to protect assets from nursing home costs or other creditors.
  • Trusts used for estate tax planning and reduction of estate tax liability.  These are trusts that are designed to defer estate taxation or to reduce the portion of an estate subject to estate taxation (A B Trusts, Irrevocable Life Insurance Trusts, Grantor Retained Annuity Trusts (GRATs), Qualified Personal Residence Trusts (QPRTs), etc.).


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