Credit: AZ Statewide Paralegal
The process of arranging a trust is something that is often not even considered until someone drafts a will with a qualified elder law attorney. In spite of that, they are a crucial aspect of estate planning. The development and execution of trusts is the backbone of planning one one’s financial future, or that of their family’s. Upon death and/or illness, where will one’s assets go? That’s part of what trusts help determine.
There tends to be some confusion about the difference between a will and trust. In simple terms, a will spells out how one wants their affairs distributed/taken care of after they die. A trust, on the other hand, is a fiduciary arrangement that gives a trustee the right to hold and manage assets for the benefit of a specific purpose or person. Trusts may be utilized during the life or death of the creator, depending how it is arranged, and can often be created in conjunction with a will.
Trusts are key to avoiding probate. On paper, probate doesn’t seem that time consuming, as it is the process in which a person’s assets and property are distributed post-death or illness. When one is involved in probate, however, they realize how many problems it can cause. One of the main issues people have with probate is that it requires mandatory court involvement, which can be time consuming and expensive. These fees come directly out of the estate, which means less money for the beneficiaries.
Trusts skip the probate process. They allow for the smooth transition and private handling of all distribution and can even eliminate the need for court involvement entirely. There are a number of trusts that can be arranged based on the needs of the grantor– from revocable trusts to special needs trusts. Age, health, and financial situations are key indicators as to what type of trust one might require. The best way to determine what one needs is through the assistance of a wills & trusts layer.
While one will still likely need an executor for the trust, that trustee’s compensation is taken directly out of the trust and is far less expensive than the court fees that would follow probate.
Trusts are one of the many aspects of estate planning that should not be left in the hands of an average person. In order to assure you (or a loved one) has their financial future properly secured, receives all the benefits they are entitled to, and sets things up well for their family in the event of their death, you should always work with an elder law attorney. Elder law attorneys have the skillset you require to ensure your estate plan is properly tailored to your life and needs so you can rest with ease.