Sacramento is the perfect city to settle down, start a family, open a business or retire. In the midst of all these crazy life decisions, it would be unwise to forget about estate planning tools at your disposal, such as wills or trusts. Once settled in a city like Sacramento, it is likely the perfect time to begin estate planning to address the what ifs. Here is why becoming the trustor of your estate plan is not such a bad idea.
The basic function of a trust is to distribute and manage assets, both during life and after death. It ensures that specific assets are managed appropriately and used for their intended purpose. There are usually three main parties involved in the management of the trust. There is the trustor or owner of the assets, the trustee or the manager of the assets always in benefit of the beneficiary or recipient of the asset. The trustee is usually compensated appropriately for acting correctly in fiduciary interest of the beneficiary.
This is why a family trust can be so meaningful for both trustor and beneficiary. For example, let's say a grandfather wants his grandchild to take over the family business one day. He is unsure if he will be around to forever to oversee this change, so he sets up a trust to ensure that this asset is around and correctly managed for his grandchild to take over one day. Now, trusts cannot protect against things like poor sales or stock depreciation. But, trusts can help ensure that assets are managed in a way that ensures the grandchild will have an opportunity to oversee them one day.
In addition to this, trusts often come with many tax-saving benefits. As many know, large assets can come with expensive tax responsibilities. Taking even some of the burden off the shoulders of future generations can make all the difference. It is important to find a trustee that the trustor believes can effectively manage the assets that need protecting.
Source: Estate.FindLaw.com, "Trusts: An Overview," accessed on Aug. 3, 2015