Forming a Trust

End of Life Management Toolkit #7 | by Team Passare and Robert L. Shepard

2. What is the Purpose of Forming a Trust?

A trust commonly solves two issues that arise in estate planning: avoiding probate and leaving assets to minors. Probate is the court-supervised process by which title to assets are transferred. In simple terms, most people want to avoid probate because:

  • It is expensive.
  • It is time consuming. It typically takes a year or more to complete probate even with full cooperation from all parties.
  • There is a public record of everything that occurs pertaining to the matter.

If any of your beneficiaries are minors, any inheritance they receive must be supervised by a court-appointed guardian, which typically requires lawyers and court appearances. Further, the beneficiary will receive any funds when they legally become an adult.

With a trust, it is easier for the trustee to manage these assets for the benefit of the beneficiary (or beneficiaries) without court supervision. The trustee can designate the age at which a beneficiary may receive the funds, to ensure wise and thoughtful allocation of funds.

Now, take a few minutes to answer these questions:
  1. Are any of your beneficiaries minors?
  2. If your beneficiaries are minors, how do you feel about a court-appointed guardian?
  3. For your situation, how would a trust benefit your End of Life plans?
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