Types of Trusts

Is a Trust right for me?

Schedule an appointment with The Taormina Firm to learn more about how a Trust could help protect you and your family.

Introduction

Trusts serve two main purposes: asset protection and probate avoidance. Trusts can also provide for young children and loved ones with special needs. Learn more below or by contacting The Taormina Firm, an experienced estate planning law firm.

Description

A Trust is considered a "legal fiction." While the creator of the Trust still maintains control over their property, legal ownership of the property is granted to the "Trustee" of the Trust for the benefit of a third party. To better understand this, it is important to first introduce you to three characters: (1) The Settlor/Grantor, (2) The Trustee, and (3) The Beneficiary.

  1. The Settlor/Grantor: The person or persons who create the Trust.
  2. The Trustee: The person who holds legal ownership over the property of the Trust and administers the Trust.
  3. The Beneficiary: The person or persons for who benefit from the property held in the Trust.

A Trust can be created during the lifetime of the Settlor/Grantor (known as an "Inter Vivos Trust") or after the death of the Settlor/Grantor (known as a "Testamentary Trust").

A Trust can also be revocable or irrevocable. Revocable Trusts allow for the Settlor/Grantor to amend or revoke the Trust during their lifetime. Irrevocable Trusts, as the name implies, cannot be amended or revoked, except under certain circumstances.

Trusts serve two main purposes: asset protection and probate avoidance. Depending on whether the Trust is Revocable or Irrevocable, creditors might have a hard time getting at the Trust assets. For a Revocable Trust, it is advisable to include a "spendthrift provision" which states that the creditors of your beneficiaries cannot access the Trust funds to pay themselves back until the Settlor/Grantor has died. Contrast that to certain Irrevocable Trusts where the Settlor/Grantor can shield their assets from creditors, but likely will not retain the use and enjoyment of the property held in Trust.

To learn which Trust might be best suited for you and your family, please contact The Taormina Firm to talk with Vince Taormina, an estate planning attorney, or see the "Types of Trust" tab on the left-hand side of this page.