Trusts Attorney in Blaine, Minnesota
There is a common misconception that trusts are just for the wealthy. That is not true, as anyone can benefit from setting up a trust, regardless of their financial status or age. Trusts can be effective in helping you manage your assets and making sure that your property is distributed to your heirs according to your wishes.
The laws surrounding trusts are complicated, which is why it’s important to consult with an attorney if you are considering setting up a trust. As a knowledgeable estate planning attorney at The Law Office of Robert J. Everhart, PLC, I provide detailed advice to clients in Blaine, Minnesota, and throughout Ramsey, Hennepin, and Sherburne counties. When you’re ready to start planning for the future, I’m ready to help.
Trusts in Minnesota
Simply put, a trust is a legal arrangement under which the trustor (also called the grantor) designates another person—a trustee—to hold and manage property for the benefit of a beneficiary. A trustee and the beneficiary of a trust have a fiduciary relationship, which means the trustee must act in the best interests of the beneficiary.
Trusts created during the trustor’s lifetime are broken down into two types:
Revocable trusts. A revocable trust permits the trustor to change the terms of the legal document at any time.
Irrevocable trusts. When a trustor sets up an irrevocable trust, changing the terms of the document becomes more difficult. Usually, altering or revoking an irrevocable trust requires the consent of the trust protector, beneficiaries, and the court.
Many people who consider creating a trust wonder, “How is a trust different from a will?” There are several differences between a trust and a last will and testament, including but not limited to:
A will becomes active once the testator (the person who creates the document) dies, while a trust becomes active the moment it is created;
A will may go through probate after the testator dies, while assets held in a trust can avoid probate because, technically, they are no longer the trustor’s property; and
Trust proceedings are always private, while probate proceedings, which include matters related to the decedent’s last will and testament, are public records.
There is no need to choose between a trust and a will. A trust can be used to complement the will to obtain greater control over assets during one’s lifetime and after one’s death.
Why Do People Set Up Trusts?
There is a multitude of benefits to creating a trust. While different types of trusts can serve specific purposes, people set up trusts to save their family money, time, and paperwork after their passing. Those are not the only reasons to consider creating a trust. Other reasons include:
Placing assets in a trust allows you to avoid the costly and time-consuming probate process;
Setting up a trust allows you to retain greater control over the spending of your money and management of your property;
You can protect assets held in a trust from the creditors of your beneficiaries;
The trust administration process is quicker than probate administration;
You can make arrangements for the management and protection of your assets in the event of your incapacity;
You can protect your separate property acquired before the marriage from possible division in the event of divorce; and
Having a trust can help you reduce or avoid the estate tax.
When setting up a trust, you must demonstrate that you have the mental and physical capacity to create the document. Keep in mind that you are also required to designate a trustee for the trust and choose beneficiaries. An estate planning attorney can help you navigate the details.
Choosing a Trustee and Beneficiaries
One of the most complicated aspects of setting up a trust is choosing a trustee and beneficiaries. There are at least three factors to consider when choosing a person to serve as the trustee:
Time. A trustee should have enough time to perform a significant amount of work when managing the trust.
Responsibility. A trust is called a “trust” for a reason. You should trust the person you designate as a trustee because they bear a great responsibility in ensuring that trust assets are handled properly.
Expertise. While many people choose to name their spouse, friend, or family member to serve as a trustee, individuals with no expertise may be more likely to make mistakes when managing the trust.
Appointing a trustee is not the only tough decision you should make when creating a trust. You must also choose beneficiaries of the trust. While the beneficiary of your trust can be whoever you want, it is important to choose your beneficiaries wisely.
Serving Blaine, Minnesota
As a trusts attorney with decades of experience serving the estate planning needs of people in Blaine, Minnesota, and surrounding areas, I understand that a trust should be specifically tailored to each client’s individual needs and circumstances. At The Law Office of Robert J. Everhart, PLC, I am committed to helping my clients achieve their trust goals in the best way possible. I look forward to speaking with you to help you understand your options. Schedule a consultation today to get started.