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Setting Up A Trust

A trust is a legal entity established to manage a person’s property before and after the person’s death. Setting up a trust can involve complex legal issues requiring specific knowledge of tax codes, state laws, and estate planning. There are many types of trusts that may be drafted according to your particular needs. If you think setting up a trust would be to your benefit, be sure to hire an attorney who specializes in wills and trusts, as this is not something you can do alone.

A trust can be created separately from a will, but a trust can also be included in the provisions of a will. If the trust is part of the will (a testamentary trust), it takes effect when the grantor dies.

Trusts are not just for the very wealthy, and there are many reasons for a establishing a trust, including the following:

The following are some terms you’ll want to understand before you set up a trust:

Grantor - The person in whose name the trust is set up and whose assets are transferred to the trust. The grantor may also be a beneficiary and a trustee of the trust.

Trustee - The person who manages the trust. This can be the grantor, a spouse, friend or relative, or someone hired to act as trustee (like an attorney or bank officer). Spouses often name themselves as cotrustees.

Successor Trustee - The person who manages the trust if the grantor/trustee dies or becomes incapable of managing the trust. In the event of the grantor’s death, the successor trustee performs many of the tasks that the executor of a will performs.

Beneficiary - Those individuals (or organizations) named in the trust who will receive property or money from the trust. Some grantors establish trusts to benefit a favorite charity or an alma mater.

Assets - The bank accounts, stocks, real estate, etc., that are transferred to the trust. Any accounts or property transferred must be retitled with the trust as owner. Get advice from an attorney on funding a trust, as not all assets are appropriate.

More Details About Trusts:

Learn about wills.

A will is the most basic part of an estate plan. To learn more, go to Who Needs a Will? and Leaving a Will.

Let us help. representatives can help explain the value of trusts and how your life insurance and investments play into your estate-planning decisions.

Western & Southern Life does not provide tax or legal advice. Please contact your tax or legal advisor regarding your situation.


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Last Updated: 12/14/2017