Happy Wednesday from your legal team at the Law Offices of W. Woods Doster, P.A. This is Attorney Brown speaking and we hope all of you are staying safe and looking at the bright side of life under quarantine. With the beautiful weather this weekend, I spent most of my day Saturday taking it in by working in the yard. I stayed out there so long that I was using tools and gadgets that I did not even know I had! The yard looks great and my wife is happy that I am finally getting around to things on the “honey-do” list. Hopefully, the pleasant weather maintains so we can at least enjoy simply being outside.
In this week’s edition, I am going to discuss the topic TRUSTS. Trusts are a great tool for estate planners that provide clients with many benefits. But for some reason, it seems that trusts have a negative reputation. Maybe people think trusts are too complicated or they are only for the mega-wealthy. While it is true that trusts come in all shapes, sizes, and flavors, they all have the same basic formulation.
A trust is composed of three parties. The first party is the Grantor (also known as trustor or settlor). The Grantor is the person who creates the trust and gives the assets to be put in trust. The second party is the Trustee. The Trustee is the person who becomes responsible for taking care of the assets. The last party is the Beneficiary. The Beneficiary or Beneficiaries are the people who are to receive the benefit of the assets in trust. The Beneficiary gets to receive all the benefits of the assets, but they do not have the burden of maintaining and managing the assets.
Here is a simplified example. Grandpa has a stunning 1966 Corvette and Grandson, who is ten years old, has always adored the car. In Grandpa’s brilliant estate plan, prepared by the Law Offices of W. Woods Doster, P.A., he decides to leave the car in trust for Grandson since a ten-year-old cannot drive or sell a car (legally). He makes Grandson’s father the trustee, and therefore making the father responsible for maintaining and caring for the car. Under the rules Grandpa created in the trust, when Grandson turns twenty-two years old his father will hand over the keys and Grandson will get the Corvette free and clear. Therefore, the trust Grandpa created protected the Corvette for Grandson until he was old and mature enough to care for the Corvette himself.
Trusts are as unique as the individuals that create them. They can be useful in all sorts of situations. They can be used to protect from creditors or predators. They can be used to protect minors and elders. If you have any hesitation about giving or leaving an asset outright to someone, a trust may be the answer for you.
As always, stay safe and healthy!