Using Trusts in Estate Planning
You can establish a trust that takes effect during your lifetime or upon your death. Either way, trusts can be used to accomplish a number of estate planning goals. While trust strategies can be complex, the concept of a trust is relatively straightforward. A trust is created when you transfer ownership of your assets to a trustee (either an individual or a trust company) with instructions for them to use those assets for the benefit of a beneficiary.
Testamentary Trust
A testamentary trust is created in your will and takes effect upon your death. The assets relating to a testamentary trust form part of your estate, so they are subject to any estate fees or taxes that apply. The trust can be changed at any time before your death by simply having a new will prepared.
Living Trust
When you establish a living trust, also known as an inter vivos trust, property ownership is passed immediately to your beneficiaries. You can add more property to the trust over time. Because the transfer of ownership is during your lifetime, the trust assets do not form part of your estate and are not subject to probate.
When Should You Establish a Trust ?
Whether it’s best to establish a trust during your lifetime or upon your death will depend on the intended use and your personal situation. This decision depends on many factors, including your need for the assets during your lifetime.
It is advisable to contact us to discuss about your needs and to find out the best strategy for your specific estate planning and goals.
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