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What is a Trust?

A Trust is a legal document that is set up to protect your assets while you are living and how they are to be divided when you die.  A Trust will have its own Federal Identification Number. A Trust can hold property or other valuable assets. 

Do I need a Trust?

Generally, a Trust is set  up to lower any tax issues your Estate may incur as a result of its value. It may be set up to allow a spouse to inherit with less tax benefits. Deciding if you need a Trust is good reason to discuss your Estate and your wishes with legal counsel. 

What about a Land Trust?

A Land Trust is a document that will place your home residence into Trust. This will not change ownership. You (and your spouse) are the Trustees. You have 100% use and benefit of the home. You can sell it too. If the home is still in the Trust upon your death, then the home transfers to the beneficiaries. The Trustee makes sure the proceeds from the home sale or rent is given to the beneficiaries. This also allows the Trustee to enter into a contract to sell the property and to complete the sale without having to open a Probate Estate in the court system. Since, your home is usually the biggest asset you have that does not have a beneficiary, a Land Trust is good way to avoid Probate. 

I find that a Land Trust is more beneficial then a Transfer on Death Deed (TOD) for several reasons. The Transfer on Death Deed is recorded and is a public record. This would allow others to see who is going to inherit your property. This process can also be complicated as it does not designate one Trustee to take care of the property. The people who inherit under TOD may not agree on how the property should be sold, the price and who should be paid for cleaning it up.

What happens to the Trust after I die?

A Trust can continue to be open and operate after your death. If worded properly, it will be irrevocable. In other words, nothing in the Trust can be changed. Prior to your death, you can set up the Trust as Revocable and able to be amended. Meaning, you can change it to fit your needs as the years pass. This is generally the recommendation, but again is something to be discussed with your legal counsel.