Trusts are considered to be among the most beneficial planning tools that estate planning attorneys have access to. However, because many individuals do not understand what a trust is or how it can help them, they fail to reap the benefits of this estate planning tool.
What Is a Trust?
A trust is a legal agreement that one creates to manage their property. The document is private, so it is not publicly recorded. Generally, a trust involves one person holding title to the property, subject to an obligation that the individual will use or keep the property for the benefit of another.
The parties to a trust often include:
- The Settlor: This is the person who creates the trust.
- The Beneficiary: The trust will hold assets for the beneficiary’s benefit.
- The Trustee: The trust’s assets will be managed by a trustee, who will have legal responsibility for overseeing the trust’s proceeds and managing them in accordance with the wishes indicated.
Two Types of Trusts in Louisiana
There are two main types of trust: revocable and irrevocable.
- A revocable trust is one in which the provisions can be altered or canceled according to the settlor’s wishes.
- An irrevocable trust is a trust that cannot be terminated or modified without the beneficiary’s permission. Once the settlor sets up this trust, it effectively removes their ownership rights to the assets and the trust.
Once a person has decided on the type of trust they want, they can decide what category of trust they will create. These categories include everything from a special needs trust to a trust created to care for an animal. However, consider reviewing these trusts with an experienced Louisiana estate planning attorney to understand these options better.
The Benefits of a Trust
Many people believe that trusts are only useful for the wealthy, but this is not entirely true. Trusts have a flexible nature that allows them to provide for a wide range of circumstances, objectives, and needs. They can address the goals and concerns of most people, regardless of their wealth. For example:
- Trusts can ensure that a dependent with a disability or mental health condition receives the care they need.
- Trusts can help secure assets for specific purposes, such as a beneficiary’s education.
- Trusts are used for privacy reasons, such as keeping a person’s intentions from being publicly posted.
- Trusts can be used for estate planning purposes.
- Trusts are sometimes used to help with tax savings, but this will depend on the type of trust set up.
Contact Losavio & DeJean, LLC for Further Information About Trusts and Their Benefits
At Losavio & DeJean, LLC, we know that every family is different. That is why our skilled estate planning attorneys provide our clients with personalized estate planning services to ensure their best interests are met.
If you are considering creating a trust or want more information about the estate planning process, contact our legal team today to learn more about our services.