One of the most common misconceptions about trust funds is that they only benefit the wealthy. However, this is far from the truth. A trust is a valuable estate planning tool everyone should consider when preparing for the future. If you have any assets you would like to pass down, a trust fund is a great way to ensure that your wishes are met. It’s essential to understand that this document is distinct from a will in that a will only takes effect upon the creator’s death. A trust allows you to manage your assets through a third party while alive and after you pass. If you’re interested in setting up a trust, understanding the process and learning how a Woodland Hills trust attorney can help is essential.
How Does a Trust Fund Work?
A trust fund is a document that holds property and assets for a specific person or organization. This is something that many people opt for, as it ensures their assets are managed according to their wishes.
Similarly, a trust is comprised of three entities to be established legally. The first is the grantor, the party responsible for the assets included in the fund. Next is the trustee, who is the party responsible for managing the assets placed in the fund. The final person involved is the beneficiary, who will receive the funds.
The assets held in a fund can include money, property, accounts, stocks, and businesses.
What Are the Different Types of Trusts?
There are various trusts available to set up, so ensuring you consult a knowledgeable entity before making the final decision about which fund you should set up is vital to choosing the best option. The following are all examples
of trusts that you can choose from:
- Spendthrift
- Testamentary
- Charitable
- Special Needs
- Bypass
- Blind
- Inter vivos (living)
- Irrevocable
Ensuring you look into the different circumstances addressed by each trust is crucial to making the best decision for your financial needs. There are distinct stipulations for the various funds. This means your assets could be handled differently depending on the funds and beneficiaries involved. Therefore it is essential to research the different options to pick the trust that best reflects your wishes.
How Do I Set One Up?
If you want to set up a trust fund, there is an in-depth process you will need to follow to ensure it is executed according to your wishes. First, you must decide which assets you want to place in the trust before identifying who the beneficiaries of the fund will be. Once you have the basic information determined, you will need to narrow the rules surrounding your trust. This includes outlining when the beneficiaries will receive the funds. Next, you will choose the trustee to oversee and manage your trust. Though you may want to select a reliable family member, sticking to an unbiased third-party entity, like a financial institution, is recommended.
Finally, you will need to draft the document with an attorney. This is essential to ensure the document is legally recognized and valid. If you need a competent lawyer to help guide you through the trust fund process, contact The Law Offices of Yacoba Ann Feldman today.
