What is a Trust?
What is a Simple Trust Example? -
A trust can be created simply by doing a simple thing. An example would be a woman asking a friend to "hold her package" and give it to her husband when he arrives.
There are three positions to consider.
1) The maker of the agreement is the creator.
2) The person holding it is the trustee.
3) The beneficiary is the person that owns the package.
Nothing in the example would change the ownership of the package. The package would not be available for debts of the temporary holder.
What is a normal Family Trust Example? -
A married couple create a trust (creators), to distribute assets to their children (beneficiaries) when they die.
The married couple are the Trustees that continue to control, as always.
The children are the beneficiaries of their parents, as always.
There is no difference when they are alive and well.
The safety plan goes into effect upon death of both parents.
The big difference with a trust is that they have probably eliminated the expense, wasted time, and uncertainty of probate.
This could mean saving thousands of dollars.
There is no need to hire an attorney, no prevention of getting the bills in order. Immediately there is the ability to sell or transfer assets, completely manage the accounts, and continue with family duties.
Otherwise, there is stress for months (or perhaps years) awaiting legal decisions.
With a trust, no permission of the court is required. You simply go on with the new decision makers (your personally selected Trustees) who immediately have full control to provide for your beneficiaries.
Simple Trust Example Options -
- Protect against estate taxes
- Assign tax responsibility to lower tax brackets
- Asset protection from lawsuits
- Asset protection from divorce
- Avoid medical expenses
- Avoid wasteful spending
- Can provide for growth in family values and maturity
- Can train minors in financial matters
- Can assist in education
- Can fund a guardian
- Can provide for care of your pets
- Can encourage better life choices
- More, more, more...
Possibilities exist as far as your imagination and money can stretch. Just remember that your imagination and assets must be converted to a clear written plan, then included in your legal trust document.