Trusts are not only for the wealthy, they are really for anyone who has assets to transfer. The assets will be transferred privately through the trust without having to go through the very public probate process. A trust is a separate entity that has a grantor, the person who established the trust, a trustee, the person who will manage the trust and the beneficiary, the person who will benefit from the trust. In some situations, one person can take on all three roles.
The grantor has the right to tailor the trust to meet the needs of the beneficiaries. In addition, the grantor has the right to specify how the assets in the trust will be invested. In order to ensure all assets are included in the trust upon death, the grantor should establish a “pour over” will to ensure all assets that were obtained after the trust was established will “pour over” into the trust.
One really important feature of an irrevocable trust is that it can protect assets from the costs of nursing home care. This type of trust can ensure your assets are protected and are distributed as you had determined even if you require nursing home care. Without an irrevocable trust, your assets would be liquidated and used to pay for your care.
As always we urge you to seek a professional, we are simply providing some general information about trusts but this is a very complicated topic so please contact your trusted estate planning attorney as well as a certified public accountant for further discussion.
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