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What Do You Know About Trusts?

What Do You Know About Trusts?

June 03, 2024

A trust is a legal arrangement where you (the grantor) transfer ownership of assets (property, money, investments) to a trustee (a person or institution) to benefit one or more beneficiaries (people or organizations) according to your instructions. This information is collected in a trust document. The trustee manages the assets according to the trust document.

What are some benefits of a trust? For individuals, a trust may help beneficiaries by shortening the time spent on the probate process and minimizing estate taxes. For families with young children, a trust may bring peace of mind by providing guidance to ensure children are financially secure by addressing probate and estate tax planning concerns. For families with special needs individuals, a trust may help to ensure someone with special needs continues to receive government benefits. For blended families, a trust may provide direction and clarity and ensure assets go to intended beneficiaries.

When may a trust not be beneficial? A trust may not be beneficial when the cost exceeds the benefits. Your financial situation, potential size of your estate, and beneficiaries should be considered. Also, a trust may not be beneficial if it is unused. If a trust makes sense for your situation, securing the completed trust document from your attorney is the first step. The next step is to ensure the right types of assets are held in trust. (Note: A trust may not be an appropriate beneficiary for your IRA. Ask your tax professional.)

When considering a trust, professional guidance is needed. An estate planning attorney is your best resource for helping you to determine whether a trust may align with your goals and family situation. Ask your financial planner for a referral.


Wendolyn Forbes is a CERTIFIED FINANCIAL PLANNER™ with Wealth Transition Finance, A Member of Advisory Services Network, LLC. Wendolyn is a fee-only financial planner and member of the National Association of Personal Financial Advisors (NAPFA).

CFP Board owns the marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the U.S.

This material is provided as a courtesy and for educational purposes only. Advisory Services Network, LLC does not provide tax or legal advice. The information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. Consult your own legal or tax professional for information concerning your individual situation.

 Originally published in the June 2024 issue of Positively Haywood by Vicinitus.