As you work to get your final affairs in order with your estate plan, you may have found yourself struggling to decide which planning options are right for you. This difficulty is understandable because there are so many useful estate planning tools that can suit a variety of scenarios. As a result, you may want to look into particular tools more carefully to determine what may work best for you.
Specifically, you may have an interest in creating a trust. You may have gone back and forth about whether you could use such a tool, but really, trusts come in various types and can have uses for almost anyone.
What does a trust fund involve?
When it comes to creating and utilizing a trust, three main parties are typically associated with the trust. Those parties include:
- The grantor: The grantor is the person who creates the trust. In this case, it would be you, and you could fund the trust with cash, bonds or other assets that you intend to leave to another party.
- The trustee: Because you want to use the trust to pass on assets after your passing, you will need to appoint someone to manage the trust after you can no longer do so. This person will be your trustee.
- The beneficiary: The person you want to leave the assets to is your beneficiary. The trust will benefit this person even though he or she will not have control over the assets in the trust until the trustee distributes them to the beneficiary.
You can appoint anyone you like to act as your trustee, whether a loved one or a professional. Of course, it is important that you trust the person you put in charge to follow your wishes.
What are the benefits of a trust?
You may wonder why using a trust rather than just bequeathing assets in your will would work better. Trusts have many benefits, including allowing you to gain tax benefits for your estate, leaving specific instructions for how to use the funds, protecting assets and giving you control even after your passing.
If the idea of creating a trust as part of your estate plan is seeming more appealing to you, it may be wise for you to gain more information. You may want to consult with a New Jersey estate planning attorney who can go over your specific affairs and help you create the trust fund that best reflects your wishes.