There is a misconception among people when it comes to the topic of trust and trust funds. They are often thought to be something that is meant for only the rich. However, this is not the case. There are a lot more benefits associated with trust than what reaches the public. Regardless of someone being a commoner, trust can aid in the management of assets and property. It is also helpful in the distribution of someone’s assets according to their wishes after their death. All in all, trust can save you a lot of paperwork and time.
It is legal documentation by a person or corporation that is called the grantor. The trust carries the assets/property for an individual or group of individuals who are known as the beneficiary. The trustee is responsible for the control of the trust. In some cases, the grantor can be the trustee, while in other cases, the grantor can choose a well-wisher, close friend, or family as the trustee.
What is the difference between a will and a living trust?
A living trust is designed in such a way that it works while an individual is still alive, as well as after they have passed. It can provide for possession of only those specific assets that are chosen to be placed in it, whereas, on the other hand, a will would serve for the assigning of all of the assets only after the death of the person has occurred. It has more to do with instructions as to what is to be done with the assets after someone has died. Therefore, although a will and a living trust are similar to each other in terms of how they work, these legal documentations have the differences that separate them from each other.
What are the benefits of a trust?
- Control of one’s assets: The person in question is the one in charge of specifying the terms in the trust, and handling what distribution will reach who amongst the people inheriting the property. An individual can also create a revocable trust and still have access to the trust assets while still alive, and at the same time, can decide who the remaining assets will go to after their passing.
- Protection of one’s legacy: With the help of a well-built trust, property can be protected from people that are not good at managing those assets as well as their creditors.
- Trust ensures confidentiality: A ‘will’ would later go on to become a public document. Tax authorities would require the whole list of every property owned by the person who passed away for the sake of assessing the cost of estate duty that is payable precedent to the assets getting transferred to executors for distribution to the rightful heirs. However, this whole process just does not make the mark for those wanting to keep their assets private. But the catch here is that when you choose a transfer form of trust, it will save the estate duty, and assets can be kept confidential.
- Planning of taxes: The property or assets that are transferred into the trust are not considered to be the property of the settler anymore; therefore, the capital gains or income generated with the help of those assets are taxed. This is according to the regulations concerning the legal owner. The inheritance tax is out of the question because, despite the settler’s passing, the trustee would still be in existence.
- Management of the estate: Most people do not want their property passed on right away to the designated heirs. In this case, complex arrangements are made beforehand. These include only giving the source of the income, leaving out capital. Similarly, leaving out provisions for the higher studies of children, but not letting them have access to it until later when the time arises or other cases, such as when the family members suffer from ailments, etc.
Will trust help me in avoiding the probate process?
The will must be probated after a person’s death. But a loving trustee is an altogether different legal entity & the property that is placed within is not subject to the probate if its creator comes to pass. In the end, the directives in the trust can be handled within the majority of cases.
How difficult is the process to set up a trust?
It is not a difficult process. First, financial concerns and goals must be revealed to our Brampton Wills, Estates & Trust Lawyers. Next, thoughts and opinions can be shared with our attorney, who will prepare the trust agreement. The creator of the trust must then name one trustee for the sake of managing the trust.
How can I be sure that my assets will be safe within a trust?
The property and assets are counted as separate from the bank deposits; therefore, they are unreachable to the bank creditors. To add to the security of the assets, thorough examinations of them are carried out by independent external auditors as well as internal auditors.
Will there be a need for trust if I already have possession of a will?
That may not be the case because although both documents are similar to each other in many ways, one such document cannot replace another. You would probably need both of them for better protection of the assets and property. To learn more about the positive and negative points of both legal documents, get it to touch with our attorneys, who will give you the best suggestions based upon personal wishes and current situations.
Is this whole process expensive?
While it may seem that trusts and trust funds are only something for the wealthy, that is not the case. Anyone can do this, and we will give you the best customer service at all stages of the process. Our attorneys are always there as a guide through the whole process, so money should be the smallest concern. Whatever fees are paid will only come back through quality service. At Brampton Wills, Estates & Trust Lawyer, our services do not disappoint, so do not think twice about contacting us for assistance.