More and more people are choosing trusts in place of or in addition to traditional wills. There are quite a few advantages to using trusts. Your beneficiaries will probably not need to go through probate before they can receive their gifts. You can gradually distribute money over time instead of handing your beneficiaries a lump sum, providing long-term financial benefits. Trusts can also help you keep everything private, as no one but your beneficiaries and trustee should be able to even see your trust document. Trust administration is usually less costly than probate as well.
However, there is still quite a bit of confusion about how trusts actually work. There is still a misconception that trusts are mainly for the very wealthy, when in fact, almost everyone could benefit from having a trust as part of their estate plan. If you are interested in learning how a trust could benefit you and your beneficiaries, you should contact an estate planning lawyer for more information.
Forming a Trust
Forming a trust is not nearly as complicated as many believe. It essentially boils down to executing a document that sets up a trust as its own legal entity. You then “fund” the trust by placing property in it. This is largely a legal fiction. Most people name themselves as their own trustee and lifetime beneficiary, so even after you move your property into your trust, you retain complete control over it. While technically, your trust now owns anything you put into it, as both trustee and beneficiary, you are free to do whatever you please with anything you have placed in your own trust.
You will also appoint a successor trustee. This is the person you will want to take over managing your trust when you are no longer able to do so yourself, by reason of death or incapacity. You will also name your future beneficiaries – the people you will want your successor trustee to later distribute property to.
How Are Distributions From a Trust Made?
This is mainly up to you. You can direct your successor trustee to make distributions according to a set schedule, at their own discretion, after important events like college graduations, or in just about any other way you see fit. When you pass away, your successor trustee can take control of the trust and begin making distributions right away, without any need for additional court oversight.
Speak With a Kane County Trust Lawyer
At DLAW, PC, we can demystify trusts and help you set up a highly effective trust as part of your comprehensive estate plan. Our skilled Geneva trust attorneys create strong, customized trusts for each client. Contact us at 331-222-7978 for a free consultation.