Trusts are powerful and versatile instruments that help people control how they pass down their assets. Not everyone needs a trust, but many estate planning lawyers use them to help clients avoid probate, avoid taxes, provide for children and disabled loved ones, and solve a host of other issues. The estate planning lawyers at Dworken & Bernstein can advise on the use of various trusts as one part of a customized estate plan.
A trust is where an individual, the grantor, gives property to another individual, the trustee, to manage for the benefit of other individuals, the trust beneficiaries. If you think a trust may be an appropriate option for you, you’ll need an attorney to discuss the different types of trusts with you, and their advantages and disadvantages. Trusts can be complex and have validity requirements imposed by the Ohio Revised Code. It is crucial that your trust be set up properly in order to effectuate your intent.
A revocable trust is a trust which can be amended or revoked during the lifetime of the grantor. The grantor can fund the trust with any of his property. The grantor may choose not to even fund the trust until he dies. A grantor can serve as the trustee of a revocable trust. There are a number of advantages to using a revocable trust. Many individuals implement a revocable trust so that their property will not need to go through the probate process. In order to do this, the grantor of the trust will need to title the property in the name of the trust or the trustee. While the probate process is a public process, with documents regarding assets being filed in the probate court, trusts and their contents are private. Utilization of a revocable trust may also help defray estate taxes and court fees associated with going through the probate process.
Revocable trusts are not without their disadvantages. While creating a will is a short process, only requiring that the individual revisit it every several years in case of life changes, a revocable trust will require consistent management throughout the grantor’s lifetime. If the grantor’s purpose in implementing the revocable trust was to avoid probate of his assets, he will need to ensure that later-acquired assets are also properly titled in the name of the trust or the trustee, otherwise those assets will be subject to the probate process.
Irrevocable trusts are another option for individuals planning their estate. While revocable trusts allow the grantor to amend the trust, irrevocable trusts do not, removing control of the assets from the grantor. However, despite this significant disadvantage, some individuals opt for the irrevocable trust because it typically offers increased asset protection and can effectively avoid certain taxes.
The experienced estate planning attorneys at Dworken & Bernstein can advise you of the various trust options, and which may be right for you.