Trusts are a critically important estate planning tool used to minimize and defer estate taxes and bypass the expensive and time consuming probate process. Most people do not realize that wills cause probate and in addition to being costly and time consuming probate is a public process.
A trust is a legal document created by a Donor or a Trustee (you) to hold assets that will benefit another person or entity. When you create a trust it sets forth and establishes a mechanism to hold your assets and sets forth provisions regarding the management those assets, the identities of the individual beneficiaries, and circumstances under which the trust income or trust assets may be distributed. A trust sets forth how one’s assets will be distributed to beneficiaries upon death.
Types of trusts include Revocable Trusts, Irrevocable Trusts, Supplemental Needs Trusts, and Real Estate Trusts.