Why would I need a Trust?

The simple response is for either Asset Protection or Tax Protection.

A Living Trust changes the ownership of your property during your lifetime. As part of your Estate Planning, you use a Trust to transfer property into a Trust. The assets within the Trust can then be used during your lifetime. At your death the Trust is then used to distribute your assets to the beneficiaries you designated when creating your Estate Plan. A Living Trust is popular because they are an alternative to probate. established as a useful tool in building generational wealth.

How does a Trust work?

A Trust is a contract between the Grantor (the person who creates the trust), the Trustee (one or more who control the trust) and the beneficiaries (those entitled to benefit from the trust). You, as Grantor, determine how the Trust will be operated by the Trustee and who benefits, how they benefit and when they receive their benefit.

What is a Revocable Trust?

A Revocable Trust may be updated or terminated at any time if the Trustor is of sound mind to do so. Here are some of the reasons for Alabama residents to consider setting up a Revocable Trust:

Avoid Probate: Assets that are held in a Trust can be passed directly to the beneficiaries when the trustor dies without the need for them to go through probate. This means that the transfer of assets can be done without any court oversight or involvement.

Ensure Privacy: Probate is a public court proceeding, and anyone can review the documents that are filed there, including a Will. This means that complete strangers could potentially look through your will and find out what property you left to your heirs. Trusts, on the other hand, are not filed with the court and do not become part of the public record.

Avoid Guardianship or Conservatorship: Revocable Trusts are not just for preparing for death, they also help plan for potential incapacitation.

If you become incapacitated without a Trust, your loved ones may have to go through a costly court proceeding and be subject to the restrictive rules of a court-supervised Guardianship or Conservatorship.

With a well thought out Trust, your successor trustee can immediately take over management of the assets if something were to happen to you.

Can My Family Contest the Terms of My Trust?

Trusts help to ensure that you minimize the chances of a contested estate:

•  If there is a dispute among family members after you are gone, it is much more difficult to contest a Trust than to contest a Will.
• The main reason being that Trusts are typically set up several years before the trustee passes away or becomes incapacitated and a successor trustee takes over.
• Because you will likely be personally involved with the management of the Trust for a period of time, it is much harder to argue that the terms and conditions of the Trust do not reflect your true wishes.