A family trust, is also known as a living trust or a revocable living trust, and is a legal document that permits the person who prepares it or has it prepared to make changes to it at will. This kind of trust covers how a person’s assets are managed before and after death. These arrangements can include anything from beneficiaries to real estate and cash allocations.
The major reason this type of trust is prominent is because it typically lowers estate taxes, avoids probate procedures and prohibits public disclosure of a person’s assets and worth. Unlike the simple will, a family trust maintains all terms of a settlement private and protected from any government seizure or public scrutiny. A simple will canensure the distribution of some of the deceased’s property, but anything not specifically mentioned can be subject to public probate procedures.
Unique in its Structure
What makes the family trust unique is its structure. It commonly consists of three main parts, the grantor, the trustee and the beneficiary. Depending on how it is prepared and who prepares it, the term grantor can be substituted with the words settlor, creator or trustor. The other two terms are generally consistent in all family trusts.For a family protection trust in Suffolk, make sure to use a reliable and trustworthy firm.
The grantor is generally the person who prepares the family trust, normally with the assistance of a legal professional who specialises in trust preparation. The trustee is the person entrusted by the grantor to protect the property. This person is mainly expected to administer the property to the beneficiary according to the instructions and wishes of the grantor.
Three Roles
In a revocable living trust, the same person customarily has all three roles when the document is prepared. This will guarantee that the grantor’s power over the property at hand is not usurped by the trustee. The only way that a trustee can take control of the property while the grantor is still alive is if the grantor has been determined by law to be mentally incompetent.
After the grantor dies, the trustee then takes over. The trustee is lawfully compelled to distribute the property listed in the trust precisely as the grantor wished. At this point, the trustee can also become the beneficiary or one of the beneficiaries if the grantor has so directed.
Commonly Preferred
Family trusts are commonly preferred over other plans due to their typical simplicity. The powers of the grantor and trustee are typically considered irrefutable, so no room for any kind of challenge actually exists. Because of the sometimes confusing legal terms which are commonly involved, it is usually advised and in one’s best interests to engage the assistance of a professional to avoid any kind of uncertainty or the making of any mistakes.
This simply gives all people involved, a safer sense of security.