Trusts are established to provide legal protection for a person’s assets. Certain trusts can also be used as a way to minimize estate taxes.
While a trust can take many forms, it always contains three basic components:
- The trustor (also referred to as the grantor)
- The trustee
- The beneficiary
The way a trust functions is simple: The trustor transfers ownership of assets to the trustee for the purpose of safeguarding them for the beneficiary for a variety of purposes.
No matter what their purpose is, trusts always fall into two categories: Revocable and Irrevocable. A revocable trust can be changed or terminated, and an irrevocable trust typically doesn't allow any changes once the terms have been finalized. Both types have their advantages, including:
- Helping to minimize taxes or avoid probate
- Protecting assets from creditors
- Providing instructions to safeguard assets for your beneficiaries
Some disadvantages may include:
- The amount of time and money required to establish
- That it can be difficult to revoke or change
Additionally, as mentioned in our article about wills, the terms of your will might become a public when submitted to probate, depending on where you live. A trust can be used as a way to get around that for the sake of privacy.
For more information on revocable trusts, click here . If you want more information on irrevocable trusts, click here.
A trust can help protect your assets and give you peace of mind. Reach out to one of our professionals at BECU Trust Services. We can help you answer any questions about the process and refer you to an attorney. Contact BECU Trust Services at 206-812-5176, or firstname.lastname@example.org.
BECU Trust Services is a trade name used by Members® Trust Company under license from BECU. Trust services are provided by Members® Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. This is for informational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant. Trust products not federally insured, not subject to credit union or affiliate guarantee, and may lose value.