Part 2 of Mansour Gavin's Estate Planning Basics series which breaks down the process of helping clients set up Trusts.
One of the main advantages of a Trust is privacy. If you recall from our discussion of the probate process in the series on Wills, only assets owned by the client in his or her name alone go through the public process of probate administration. Since the assets of a trust are owned by the trustee, they are not subject to the probate process. And that means there is privacy. While the client is alive, there are no public arguments over the client’s competence or incompetence, and no public identification of how much money the client has. After the client’s death, what assets remain for the surviving spouse, or children, or both, are not publicly identified, protecting them from those who might want to take advantage of them after their recent loss.
Along with privacy, there is continuity of management with a trust. Since the trust agreement spells out what to do while the client is alive and competent, and alive but incompetent, and what to do after the client has died, all of the client’s plans and goals are spelled out in one document. When the client wants to review what happens to his/her property there is just the one document to review.
While most Wills direct an immediate distribution of assets, trusts often have provisions that stretch out well into the future. Distributions may not occur until various ages have been reached, or goals met, or, sometimes, generations have passed. So, a client who wants to enable descendants to get a higher education may have a trust specifically tailored to that, and not run the risk that an immediate distribution to a young person goes to waste.
Trusts are also quite flexible. Since a trust agreement is a contract, it does not have to be executed like a Will, in front of witnesses (or, in some jurisdictions, a notary, or both). Where the client is also the Trustee, an amendment to the Trust can be done simply and quickly. (More on modifying a trust in a future topic.)
After the client has died, the distribution of the trust assets can often be completed more quickly than those that go through the probate process. With probate, there are required notices and time frames that need to be observed before the Executor would release the assets to the heirs. With a trust, there are no specific time requirements, so it is much more likely the administration can be completed more quickly.
In our next topic, we will discuss some of the disadvantages of trusts. You can view the first series of Wills and Probate Administration here and reach out to Dan with any questions. Our attorneys are always ready, willing, and able to meet and discuss any questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small steps, the problem that used to lead to procrastination and uncertainty has been addressed and resolved. Learn more about Mansour Gavin’s Estate Planning & Probate group or contact us today.