Although a trust is often associated with wealth and grandeur, these days, the typical American family can benefit greatly from incorporating one or two into their estate planning. When it comes to setting up a trust, there’s simply no time like the present. Below, an attorney from Ng & Niebling in Honolulu, HI, explains the basics and benefits of trust creation.

What Is a Trust?

A trust is a legal document that holds assets or property for a particular individual or party, known as a beneficiary. The trust is managed by a third party – known as a trustee – who is designated by the creator of the trust. 

You may choose to set up a trust for a variety of reasons, including designating how and when your property and assets will be distributed following your death, paying for your grandchildren’s education while you are still alive, or minimizing estate taxes and avoiding probate upon your passing.

How to Create a Trust

Before you establish a trust, you must first determine the reason for creating it as well as the associated beneficiaries. This will help you determine what type of trust you should create. For instance, if you are hoping to pass on assets to your loved ones while avoiding probate, a revocable living trust may be in your best interest.

Next, you must determine how your trust will be managed and distributed. For example, you may choose to have your beneficiary receive assets at a particular age in a lump sum or over an extended period of time in set amounts. 

To make your trust official, it must be funded. This can be accomplished in a variety of ways, ranging from real estate and bonds to stocks and cash. If you prefer, you may also elect to fund your trust over a period of time, through regular deposits.

If you need to create a trust in Honolulu, HI, Ng & Niebling is the law firm to call. Serving the community for over 40 years, their attorneys focus on a broad range of estate planning services, including probate, wills, conservatorships, and power of attorney. Contact their office online or call (808) 732-7788 to schedule your free initial consultation.