A trust is a legal document created to manage assets for the benefit of others. The trustee of a trust manages the assets and income of the trust as set forth in the trust document. A trustee has a duty to administer the trust according to its terms in the best interests of the beneficiaries. A trustee also has a duty to be impartial, to avoid any actual or potential conflicts of interest, to keep the administration of the trust confidential, and to provide periodic reports to the beneficiaries.
Trusts are created for a variety of reasons, such as:
- Protect beneficiaries from creditors
- Protect beneficiaries who are too young or financially unsophisticated
- Protect public benefits for disabled individuals
- Avoid probate
- Reduce income or estate taxes
- Balance the needs of current and future generations
The best way to set up a trust is to consult with an experienced estate planning attorney. Foster Thornton Welling works with many qualified estate planning attorneys. Please contact us if a referral is needed.
Foster Thornton Welling provides trustee services for the following types of trusts:
- Revocable Living Trust – Set up to transfer an individual’s property out of their name and into a trust. There are different types of living trusts and the most widely used is the revocable living trust, which leaves the maker in control of their assets through the life of the trust or until they die.
- Bypass Trust (also called Credit Shelter Trust) – A vehicle used for spouses who plan their estates together. By leaving property to each other in bypass trust form, they can guarantee that the property will only be taxed once between the two of them.
- Survivor’s Trust – Contains the assets remaining for the surviving spouse who may use the funds in the Survivor’s Trust without restriction.
- Marital Trust – Another trust used by married couples in estate planning.
- Family Trust – Another name for a Revocable Living Trust.
- Generation Skipping Trust –The contributed assets are passed down to the grandchildren, instead of the children, in order to avoid estate tax.
- QTIP Trust – Created so the surviving spouse receives income from the trust’s assets for life but the trust’s principal is left to someone else, usually children.
- Irrevocable Life Insurance Trust – A trust set up as a means of avoiding estate taxes on life insurance proceeds.
- Charitable Remainder Trust – An irrevocable trust is established to distribute a fixed percentage of the value of its assets to a non-charitable beneficiary (usually the settlor of the trust) and at the expiration of a specified time (usually the death of the settlor), to distribute the remaining balance of the assets to charity.