Understanding Trusts And What They Are
March 10, 2021
When it comes to estate planning, there’s one thing that most people tend to forget when planning for the future. We always consider the simple stuff like drafting our will or naming our beneficiaries, but we all tend to forget to name our trustees. Now, you may be asking yourself what exactly a trustee is. Simply put, a trust is a legal agreement that lets a third party (the trustee) hold assets or ownerships for a beneficiary or even multiple beneficiaries. These trusts can be formed in a variety of ways. They also have the tendencies to tell how your assets should be passed onto your beneficiaries.
Trustees are usually chosen as people who are close to the individual managing their own estate planning. It’s essential to be careful in who you make your trustee due to how big of a responsibility it is for them. You have to consider your trustee’s lifestyle, fidelity, and even personality. While the process of choosing a trustee may seem like a complicated one at first, it’s actually a pretty simple process when broken down into smaller components. Here’s everything you need to know when it comes to naming a trustee for your estate planning.
Benefits Of Naming A Trustee
There is an assortment of benefits that come along with naming a trustee. One of the significant benefits of naming a trustee is saving on court fees for your estate planning. This is a favorite benefit due to the fact that we would all like to save a buck or two, especially when it comes to the courts. Another beneficial outcome of naming a trustee is saving time. Most court cases, especially when it comes to estate planning, can take up an abundance of your time. With naming a trustee for your estate planning, you can easily cut this time substantially.
But the benefits of naming a trustee transcend much more than saving a buck or time or cutting a couple of hours in court. Naming a trustee allows you to have complete control over your wealth and assets and how they are distributed to your heirs. Even though you are giving this power to your trustee, this won’t be a problem if you have named the right trustee for your estate planning. Another plus of naming a trustee is the security of your legacy for future generations. Naming a trustee will ensure that your legacy and name will be cemented in history.
Types Of Trustees: Revocable And Irrevocable
There are only two types of trustees: revocable and irrevocable. As the names themselves would imply, a revocable trust is a trustee that allows the grantor to revoke the trustee’s power or the assets you initially gave them control over. An irrevocable trustee is one that holds all of your assets, making them out of your command whenever you name your trustee. Surprisingly, an irrevocable trustee is usually more popular than a revocable one due to the fact that it lightens the load on the grantor’s plate when it comes to their estate planning.