Trusts are one of the most misunderstood documents in life and estate planning. There are numerous variations with respect to the types and functions of trusts, the details of which will be spared from this summary. A trust is established when property of some sort (an account, a home, some personal property, any property) is transferred to an individual “in trust” for the benefit of some other individual, group of individuals or organization. A trust can hold title to very little property or millions of dollars of property. Trusts can be established during your life, at your death or after your death. Trusts can be established to benefit you, your family, your descendants, a social or religious organization or any myriad of individuals, companies or organizations. Put simply, a trust is a vehicle by which one person holds property for the benefit of another person.
A discussion of the benefits of a trust merits a lengthy and entirely separate article. However, there is some value to understanding a few of the various reasons why someone would want or need to establish a trust. These benefits are entirely dependent on the details of individual circumstances.
(a) avoidance of the cumbersome (and expensive) probate process
(b) avoidance or reduction in gift and estate taxes (so called “death taxes”)
(c) providing for children and other descendants in an organized and prepared manner
(d) increased control over property upon death
(e) creation of incentives for behavior and accomplishment among descendants
(f) increased flexibility regarding planning for incapacity and death
(g) creation of on-going funding for charitable or religious organizations
(h) potential reduction in tax burden on life insurance proceeds
(i) privacy in financial and personal affairs regarding distribution of property
Keywords: Estate Planning, Trust, Reasons for a Trust, Schleiffarth Law Firm, Jim Schleiffarth, Lawyer, Attorney, St Louis, Webster, Missouri