What is a Trust?
Serving Families and Individuals in the Anniston, Gadsden, and Talladega, AL Areas
A trust is an important document to have in an Alabama Estate Plan because it is flexible and has so many benefits. A trust is the equivalent of having your own rule book about who is to manage your assets and how. It is a legal document that is created that can actually own property and other assets. If you set up a trust and transfer your assets into the trust, the trust now owns the asset instead of you owning it. However, when you set up the trust you can decide who is in control of the trust which in most cases is you. The person who manages the trust is called the trustee. Living trusts are commonly used by trusts and estates attorneys in advanced estate planning because they have so many benefits.
Instead of managing all of your assets and having to decide what to do with each asset individually when something happens to you (death or disability), you set up rules in your living trust that dictates what happens. If something happens to you, you name a successor trustee to take over management of the trust assets. The trust also specifies who gets your assets when you pass away. One advantage to using a living trust as part of your estate plan in Alabama is that the assets owned by the trust go directly to your heirs and avoid the time, expense, and common nightmares of probate.
For more information on trusts and other Alabama estate planning strategies, register for one of our Estate Planning Workshops OR call us at 256-792-3193 now - we are here to help.
There are basically two types of trusts. One is a revocable trust and the other one is a irrevocable trust. A revocable trust is like a piggy bank you had as a kid that had a slot at the top to put money in, but also had a stopper in the bottom so you could take money back out. That is the way a revocable trust works, meaning you can put stuff (assets) in but you can always take it back out if you want to.
An irrevocable trust is like a piggy bank that has a slot in the top but no stopper in the bottom so that once you put the asset into the piggy bank you cannot get it back out. Some people wonder why they would want to use an irrevocable trust in their estate plan. The reason is that an irrevocable trust can provide asset protection and keep your assets safe from lawsuits, bankruptcy, divorce and long term care expenses such as nursing home charges. As asset protection attorneys and nursing home attorneys we help people set up irrevocable trusts as part of our estate planning and elder law practice.
Trusts can also be used to provide asset protection for your children and grandchildren. You can put restrictions on how the assets are dispersed to your heirs at your death to prevent them from losing assets to divorce, a spendthrift child, or bankruptcy, or even a child who has an addiction problem who should not be getting money outright. Instead you can provide money to them for necessities but not give them money outright to blow on drugs or alcohol. Sadly, this is a common concern for many families today. A trust is a great way to make sure that your hard earned assets are not taken away by your children’s creditors and predators. Drafting a trust that meets your goals and objectives is part of our comprehensive estate planning process.
A trust a is a great addition to any estate and elder law plan because it allows you to avoid probate, set up your own rulebook and can provide asset protection for you and your loved ones.
If you would like more information, register for one of our free Anniston Estate Planning Workshops OR request a free copy of our book on the Basics of Estate Planning in Alabama by visiting www.AlabamaEstatePlanningGuide.com OR call us at 256-792-3193 now – we are here to help.
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