A trust is a document that creates a legal entity in which one party (the trustee) holds and manages assets on behalf of another party (the beneficiary), allowing for controlled management and distribution of property during the grantor’s life time and after his or her death.  

The grantor (aka settlor or trustor) is the person who creates the trust and transfers assets into it.  The trustee is the person or entity responsible for managing and administering the trust assets according to the grantor’s instructions.  The trustee is a fiduciary who must act in the best interests of the beneficiaries.  The beneficiary is the person or group designated to receive benefits or income from the property held by the trust.  

A trust may be created for a variety of reasons, including estate planning so that the assets are distributed according to the desires of the grantor and to avoid time-consuming and expensive probate procedures, to protect assets from creditors or legal claims, to provide fort the care and maintenance of your pets (aka fuzzy babies), to minimize estate, gift or income taxes, to manage your assets in the event you become incapacitated, or to support a charity or individual with special needs.  

A trust enables precise control over asset distribution, including conditions such as age, events, or milestones a beneficiary must meet to receive a distribution.  They are broadly categorized by the grantor and their revocability. Revocable trusts can be modified, amended or revoked during the grantor’s life and the assets held by the trust remain part of the grantor’s estate, thereby creating a source of income.  An irrevocable trust cannot be changed.  It relinquishes control and ownership permanently, most typically to minimize or limit estate tax and provide protections from creditors.   

Once a trust is created, the grantor transfers assets to fund the trust.  The trust then manages the assets according to the trust agreement, distributing income or principle to the beneficiaries as specified. The trustee has fiduciary duties to the beneficiaries of the trust.  

Trusts provide continuity of management, privacy, and can help avoid the time consumed by probate and the expenses involved in probating an estate. They allow for financial planning to address tax, creditor or personal concerns.  They legally separate ownership (held by the trustee) from the equitable ownership (grantor) and provide benefits (to beneficiaries) in a sophisticated and controlled manner.   

Want to dictate what happens to your assets from the grave? 

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Every family law case is unique, but the need for specialized expertise is universal. As a Board Certified Specialist in Marital and Family Law, Mary Zogg provides the strategic focus required to secure your financial and family future.

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