A trust is a legal entity that is created for the purpose of transferring property to a trustee for the benefit of a third person (beneficiary). The trustee manages the property for the beneficiary according to the terms of the trust document.
Beneficiary: A beneficiary is an equitable (or beneficial) owner of the trust property. Either immediately or eventually, the beneficiaries will receive income from the trust property, or they will receive the property itself. Until this time, the trust is primarily the responsibility of a trustee.
Trustee: Trustees are usually appointed by the trust, but can be court appointed in the case that no trustee was previously designated. There are two main types of trustees, professional and non-professional. A trustee has several rights and responsibilities depending on the type of trust.
Types of Trusts
|
|
Consult a financial adviser to find out which type of trust best fits your wants and needs.
Benefits of Trusts
- Provide management assistance for your heirs.
- Can help minimize estate taxes for married individuals with substantial assets.
- Contingent trusts for minors allow you to avoid the costs of having a court-appointed guardian to manage you children’s assets should you die.
- When properly funded, trusts help avoid many of the administrative costs of probate, including attorney fees and document filing fees.
- Revocable living trusts help keep the distribution of your estate and other private assets.
- Trusts can be used to dispense income to intermediate beneficiaries (e.g., children, elderly parents) before final property distribution.
- Trusts can ensure that assets go to your intended beneficiaries. For example, if you have children from a prior marriage you can make sure that they, as well as a current spouse, are provided for.
- Trusts can minimize income taxes by allowing the shifting of income among beneficiaries.
- Properly structured irrevocable life insurance trusts can provide liquidity for estate settlement needs while removing the policy proceeds from estate taxation at the death of the insured.
If you have any questions about what you have just read, or if you would like to know more about trusts and retirement planning, consult the financial advisors at Safe Retirement Solutions by calling 877-268-4086 or visit our website today!
We help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.
You can also follow Safe Retirement Solutions on Facebook and Twitter.
Sources:
Advantages of Trusts
