Myths About Trusts

A trust is a legal means of managing money and assets either for your own benefit or for the benefit of another. As the grantor or settlor of the trust, you transfer legal ownership of your property to the trust. The trustee, which can be a designated person or an institution, such as a bank, then manages that property for your benefit or another’s benefit. Trusts can very simple, or more complex, as needed to meet your specific needs. However, there are some myths about trusts that often cause them to go unused.

First, many people think that the only benefit of a trust is to save on estate taxes, so they don’t think they need one because they don’t have sufficient assets. Whether a trust actually saves you estate taxes depends entirely on the size and composition of the trust, as well as the tax laws that are in effect at the time of your death. Trusts have other benefits than saving on estate taxes, such as savings on income taxes.

Another benefit of a trust is the ability to keep your assets and financial business private. If you die with an estate that must go through probate, your will is filed in probate court and all of your assets and debts become part of the public record. If you want to keep your financial matters private, then a trust is the ideal vehicle for doing so.

A trust also can allow you to keep controls and limitations on the assets that you want to leave to your children or other beneficiaries. For example, if you don’t want to have your 18-year-old child to inherit your entire estate at your death, but would prefer that it be used for educational purposes first, and then paid out in installments to your child over a decade, a trust can be used to achieve this goal.

If you become incapacitated, a successor trustee, whom you designate, will take control of the trust assets and manage them according to the terms of the trust that you have created. In this situation, your trust protects your assets and there is a seamless transition from you as the trustee to a successor trustee, which will not affect your assets at all.

As you can see, trusts can be complex, but they are adaptable and customizable to fit a wide variety of situations. While you may be unsure that a trust will meet your needs, you can turn to Legacy Law Center for the legal advice that you seek in this situation. If you or a loved one needs help with estate planning or related issues, you should definitely contact an experienced Michigan elder law attorney at Legacy Law Center right away. Call Terrence Bertram at Legacy Law Center today and see what we can offer you and your family.