Trusts don’t only apply to seniors and wealthy people. Trusts are valuable estate planning tools that can protect your physical and financial assets, reduce your tax liability, and help build wealth for you and your loved ones. The information below may assist you in understanding uses for this powerful legal tool.

How Trusts Are Used in Estate Planning

How Trusts Work

Every trust has four elements: property, a grantor, a trustee, and a beneficiary. The grantor provides the property to be placed in the trust. The trustee is the person who manages the trust property to benefit the beneficiary, who is the person who ultimately receives the trust’s assets. In some trusts, the grantor serves as trustee. 

Types of Trusts

The two basic categories of trusts are living and testamentary. Living trusts take effect during the grantor’s lifetime. Testamentary trusts, which are included in a will, take effect after the grantor’s death.

You can create various types of trusts within the two categories and they can be revocable or irrevocable. For example, special needs trusts (SNT) hold assets for individuals who have physical or mental disabilities. A trust fund can provide for educational or business start-up expenses. Real estate trusts hold property for minor children and individuals or groups for their personal residences or commercial and investment purposes.     

Why Trust Creation is Beneficial

Trusts are valid for holding all types of property, including stock, vehicles, patent and trademark rights, and book or music royalties. Special needs trusts protect a disabled person’s rights to receive certain government benefits. Including trusts in your estate planning shields property from creditors, ensures wise asset management for children until they can manage their own assets, and may reduce your tax liability.  

Trusts are effective ways to shield and grow assets. The estate planning attorneys at Greene Law, PC in Farmington, CT, are skilled in creating trusts for individuals, couples, and families across the financial spectrum. This law firm offers wise counsel and professional service backed by more than 25 years of experience. Visit their website for more about their practice and call (860) 676-1336 to schedule a consultation.