Living Trusts
A trust is simply a document, much like a contract, that creates legal responsibility to manage assets of all types.
A trust has 3 parties:
- the person who creates the trust (grantor or settler),
- the person who will provide the management of the assets (trustee)
- and the person or persons who will receive benefit from the trust (beneficiary)
Interestingly, one person can hold all 3 of those positions. Also, a corporation or other non-person can be any one or all of the 3 positions. In the most common situation, a person creates a trust that is revocable and the same person serves as trustee and beneficiary.
If our analysis of the client’s financial situation indicates that the estate would be taxed, or likely to be taxed, we will add language that helps either reduce or eliminate the tax. Trusts will not “cure all ills,” but are one of many good techniques to use to simplify the management and transfer of assets.