A trust is an agreement that states how assets and property will be held and distributed to a beneficiary. There are many reasons why someone may wish to establish a trust. Most commonly, trusts are established by parents for their children or close relatives. Trusts are different than wills in that the beneficiaries do not necessarily receive the assets in one lump sum. Trusts usually allow the grantor, or the original owner of the property, to manage the trust during his or her lifetime. If you are considering establishing a trust for a child, grandchild, or close relative, the estate planning attorneys at the Isbel Law Firm in Winter Garden can help you to understand more.
What are the types of Trusts?
A testamentary trust sets aside a portion of your estate into a trust after you die. Trusts distribute your wealth to a beneficiary through an elected third party. The executor of the trust manages how and when the property is to be distributed. There are many functions to a testamentary trust, including:
- Conserving property for children from a prior marriage
- Ensuring the future wealth of your spouse by providing steady income through a qualified terminable interest property trust
- Managing the financial needs of a special-needs beneficiary
- Preserving the inheritance of minor children until they reach legal age
- Preserving inheritance for adults until they reach financial maturity
- Creating a fund for charity donation
Living trusts are created by the grantor through a transfer of property to a trustee. The grantor is able to control, revoke, and modify the trust during his or her lifetime. After the grantor passes, the living trust becomes irrevocable, and the beneficiary must abide by the terms set forth by the grantor as to how the property will be distributed.
Funded and Unfunded Trusts
Trusts may be funded or unfunded depending on the terms set by the grantor. A funded trust contains some type of asset or property, along with terms set by the grantor that describe how the assets are to be distributed. Unfunded trusts simply contain the trust agreement and may not receive funds until after the grantor’s passing.
Revocable and Irrevocable Trusts
Revocable trusts can be modified by the grantor during his or her lifetime. If a trust is deemed irrevocable, the grantor will no longer be able to modify it. At this point, the property within the trust is transferred to the beneficiary, who will receive the funds according to the pre-arranged terms.
Contact a Winter Garden Attorney for Assistance
The Isbel Law Firm can help you to establish a testamentary trust or living trust that fits your needs. We can discuss the advantages of different trusts and guide you through the entire process. Our firm also assists with probate and the establishing of wills. For more information, contact our office at 407-877-7115. Alternatively, you may send us a message using our contact form. Our law firm serves Winter Garden and the surrounding communities.