There are several advantages to choosing a trust instead of a will to dispose of property after death. A trust may be established while the settlor is alive and the property that would constitute the decedent's estate may be placed into the trust before the settlor dies, which may be administered when the settlor dies or just before death.
A trust is a three party relationship where one party, known as the trustor or settlor places property into the possession and control of another party, known as the trustee, for the benefit of the third party, known as the beneficiary. The settlor establishes a trust with a document known as a trust instrument, which designates the property to be held in trust and sets forth the terms.
A trust does not need to be witnessed according to the formalities of a will. It does however, need to be notarized by a notary public. This allows for the trust instrument to be recorded, and verifies the settlor's identity if the person owns real estate, and more.
A major advantage of forming a trust is that the trust does not pass through probate and does not result in public viewing, which is beneficial for those that may want to keep their financial information private. There are also some disadvantages-- in that wills are easier to prepare, especially for those with smaller estates and fewer heirs.
Generally, there are two common types of trusts: inter vivos and testamentary. An inter vivos trust is established while the settlor is still alive and may be managed by the settlor himself/herself until he/she dies. A testamentary trust is established by will and avoids any concerns that the trustee will fail to carry out the decedent's wishes because it is overseen by the court. However, the testamentary trust shares the same concerns with probating, with regard to a lack of financial privacy and probate costs.
Do you have questions regarding your trust? If so, please contact Aziz Legal by phone at (408) 203-4627 or email us at firstname.lastname@example.org.
This article is merely informational and is not intended to be used as legal advice. Use of any information from this article is for general information only and does not represent personal legal or tax advice, either express or implied. Readers are encouraged to consult Aziz Legal, or another attorney, for any specific legal matters.