A family trust is set up specifically to benefit your family.
You have thought carefully about your estate plan.
You know a last will and testament is sufficient for many people.
However, when you consider your goals, you think you may require more.
According to a recent Yahoo Finance article “What Is a Family Trust and How Do You Set One Up?,” a family trust provides greater control over your estate.
A family trust, like all trusts, involves three parties.
Who are they?
They are at least one trustmaker (also known as settlors, grantors, or trustors), trustee, and beneficiary.
The trustmaker creates and funds the trust.
The trustee follows the written trust instructions for the benefit of the beneficiaries.
In most revocable living trusts, all three parties are the same until he, she or they are incapacitated or deceased.
For example, Gretchen and I are all three parties under the Krull Family Living Trust.
When you create a family trust, it starts functioning during your lifetime.
You can set it up so it will either be irrevocable or revocable.
What are the differences?
A revocable trust allows you, as the trustmaker, to also serve as the trustee with a successor trustee to take control upon your incapacity or death.
At any time while you are alive, you can amend or revoke the trust.
Generally speaking, with an irrevocable trust you can neither make changes nor serve as the trustee.
You must designate another individual or institution as trustee.
A family trust allows you to manage property on behalf of your loved ones.
With it, you can place conditions on the use and distribution of assets for your children.
This can be especially beneficial if you have minor children or children who require specialized medical care.
You also can avoid probate by setting up and fully funding a family trust.
Work with an experienced estate planning attorney to evaluate whether a family trust is an appropriate approach to meet your specific needs and those of your loved ones.
Reference: Yahoo Finance (March 17, 2020) “What Is a Family Trust and How Do You Set One Up?”