In addition to a
will,
you can use other legal arrangements to ensure your heirs get their inheritance when and how you wish them to. A
trust
is such an agreement. It allows assets to be held and managed by one person, called a
trustee,
for the benefit of another, called the
beneficiary.
You can use different kinds of trust arrangements to accomplish different goals, including:
The trust document outlines the understanding between the grantor and the trustee about how the trust property will be managed, the purposes for which income and principal may be used, and the duration of the trust. A trust might terminate after a specific number of years or when the youngest beneficiary has reached a particular age stated in the trust document.
Before going to the time and expense of setting up any trust, though, it’s important to define your goals and consider what you hope to accomplish. You should also seek professional tax advice. At the same time you’ll want to consider the cost of holding property in trust, particularly if you select a corporate trustee, which will charge a fee for these services.
