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Trust Funds

Trusts can be appropriate for people with minor children or those who want to avoid having their estate go through probate upon death.

Consult a licensed attorney experienced with estate planning and trust matters before making any final decisions



A trust establishes a legal entity that holds property or assets for the person who created it.

The person who creates the trust can be called a grantor, donor, or settlor. When the grantor creates the trust he or she appoints a person or entity (like the trust department of a bank) to manage the trust. This person or entity is called a trustee.

The grantor also chooses someone who will ultimately benefit from the trust.This person is the beneficiary. In some situations the grantor, trustee, and beneficiary can all the same person. A trust is a good estate planning tool because after death because a trust doesn’t go through the probate process like a will does.


Reasons for setting up a trust include:

* Providing for minor children or family members who are inexperienced or unable to handle financial matters
* Providing for management of personal assets should one be unable to handle them oneself
* Avoiding probate and immediately transferring assets to beneficiaries upon death
* Reducing estate taxes and providing liquid assets to help pay for them
* Since the terms of a will are public and the terms of a trust are not, privacy also makes a trust an attractive option.


Some things to consider when setting up the trust include:

* The grantor has the right to specify exactly how the money in the trust is invested. The grantor and the trustee might have very different ideas about investment strategies, so make sure this gets clearly defined.
* The grantor has the right to specify exactly how the assets should be divvied up down to details like including an annual cost of living adjustment for the beneficiary or paying for travel expenses for others to visit the beneficiary in the case of illness.
* Always be sure to include a “trustee removal clause” – trusts that don’t have this clause take away the beneficiary’s right to fire the trustee if unsatisfied with the service being provided. Remember that the grantor can always add a provision that requires the beneficiary to select a new trustee from legitimate bank trust departments. Contact your state’s Department of Financial Institutions to get a list of licensed trust departments.
* If the grantor wants to ensure that upon death any assets that remain outside of the trust are transferred to it, he or she should consider having a “pour-over” will to accomplish this.

Upon establishment of the trust the grantor must complete the process of setting up the trust by transferring his or her assets into the trust. Failure to do this properly makes the trust null and void. This means that upon the grantor’s death the state will decide who gets the assets and cares for minor children.
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An older man holding a briefcase yelling into his cel phone.Protect Yourself From Trust Scams and Fraud

Source;Federal Citizen Information Center

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