Trusts
A trust is a simple concept - imagine a pot of money. The person who puts the money into the pot is called the grantor. The person who is in charge of distributing the money is called the trustee. And the person who will actually receive the money is called the beneficiary. Once you have these three elements, you have a trust. Notice that the money in the pot is separated from that of either the grantor or the trustee. However, the grantor can be (and often is) the trustee.
Living Trusts
A living trust is one that you create and put into effect while you are still alive. They may be revocable (changeable) or irrevocable. Any property that is in a revocable trust will not be subject to probate when the grantor dies, but it is still included in the estate for tax purposes. In other words, it can give your beneficiaries access to your property more quickly. It can also protect the privacy of the family. In addition, the revocable trust is precisely that it is changeable. However, any money in a revocable trust is included in the taxable estate.
An irrevocable trust avoids estate taxes, but is a much less flexible instrument. Once an irrevocable trust is set up, it cannot be changed.
Testamentary Trusts
Many people create trusts in their wills - these are called testamentary trusts. Although this does not avoid probate, it can serve other purposes, like saving money on estate taxes, or making sure the money gets used for education, or protecting it in case the beneficiary gets divorced.
Trusts are more complicated to create than are wills. We can help you determine whether you need a trust, and to shape one to accomplish your goals.