In the world of estate planning, there are three documents that reign supreme; Trusts, Wills, and Powers of Attorney. Here, we’ll be exploring the basics of what exactly a trust is.
So, exactly what is a trust?
Well, the legalese definition of a Trust is: The right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title. Easy right? How about an easier definition: A trust is a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary).
Now while those definitions are technically correct, they don’t really explain what a trust is in the real world or what it does for you. So, here is how Dale Bethel, owner and founder of the Bethel Law Corporation, describes trusts so his clients can more easily understand this immensely important and necessary document:
A Trust acts as a will substitute. Anybody with land, a house or more than $150,000 in personal assets should use a revocable living trust for an estate plan, rather than a will. A will causes court appearances - probate - while a living trust does not.
While there are a large amount of different types of trusts that can be created, there are two principle types: Private and Charitable trusts.
A Private Trust is a trust created for the financial benefit of one or more designated beneficiaries rather than for the public benefit; i.e. an ordinary trust as opposed to a charitable trust.
A Charitable Trust is a trust created to benefit a specific charity, specific charities, or the general public rather than a private individual or entity. Charitable trusts are often eligible for tax benefits as well.
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If you would like to schedule a complimentary consultation to meet with Dale Bethel to go over your Trust or Estate Planning needs, you are welcome to schedule a meeting online here or call our office at 909-307-6282.
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