Authored by R. Elizabeth C. Kitchen in Legal
Published on 10-25-2009
A trust is an agreement in which a person gives a second person property that the second person will then give to a third person. The person giving the property is called the grantor, the second person is the trustee, and the third person is the beneficiary. A trust allows a person to state who will receive their assets once they die. A trust also allows a person to state who will disperse these assets to their beneficiary. A trust is created while the grantor is still living.
When creating a do-it-yourself trust it is important to know that this document allows you (the grantor) to control your estate’s distribution. Grantors will simply transfer the ownership of their assets and property into their trust. They will then be the trustee or have an opportunity to designate a trustee. A trustee can be an institution or a person. Once the grantor passes away, the trustee will turn over all assets and property to the grantor’s designated beneficiary or beneficiaries. This process often only takes a few weeks. Once all of the assets and property have been transferred to the designated beneficiary or beneficiaries, the trust will cease to exist.
Creating a do-it-yourself trust will make it impossible for the grantor’s assets and property to end up in probate court to be distributed to the grantor’s desired beneficiaries. Probate court often takes months before the assets and property are distributed. By creating a trust and avoiding probate court, all of those involved will also avoid associated expenses and legal fees. A do-it-yourself trust will also help to make sure that everything the grantor has goes to his or her beneficiaries, and the beneficiaries they have chosen. It will also make sure that each beneficiary gets exactly what the grantor wanted them to have. A do-it-yourself trust also helps to avoid the associated emotional trauma that many probate court proceedings cause to those involved, as it completely eliminates all potential time delays in distributing assets and settling the grantor’s estate. It ensures that the all beneficiaries have uninterrupted access to principal and income.
A do-it-yourself trust protects from federal estate taxes. It is protected up to $1.5 million dollars for single people, and $3 million dollars for those who are married. Since a trust is a confidential document, it maintains privacy where a will does not ensure privacy because it is often published and is considered pubic information.
Once a do-it-yourself trust is complete, the grantor will need to sign it in the presence of a notary. Once this is complete all assets and property must be given to the name of the trust using standard transfer documents or the deed. Creating a do-it-yourself trust is relatively inexpensive as well. The grantor just needs to write out what they wish to transfer and then create a valid Declaration of Trust. There are several free online resources that offer information on how to do this. The following names need to be included in a do-it-yourself trust: the creator of the trust, the manager of the trust, the trustee, the beneficiaries, and the names of anyone who will manage any minor beneficiaries’ property or assets.