What is a Trust?
This is one of the most common things that people wonder about with Estate Planning. They just never ask the question. This video explains the concept of trusts.
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We call these things trust because they involved trusting someone to take care of our property for us. We trust them to basically manage it and have possession of it for our benefit or another person’s benefit. Here is a basic arrangement that is a trust:
If I give you $10,000 and ask you to hold on to it for me and give it to my kids in 5 years, this is the basic concept of a trust. You can invest that money and do prudent things with it, but you are being trusted to take care of that $10,000 for my kids.
I was the trustmaker (sometimes called the settlor). You are the person that I am trusting, so you are the trustee. You are being trusted to benefit my kdis with the money later. The kids are the beneficiaries.
Every trust has to have a trustmaker, a trustee, and beneficiaries. (Trusts need to have some property like the $10,000 that you are being trusted with too)
You can provide almost any kind of instructions that you can dream of for the trustee to do with the money. You can also instruct them on how to invest it and the like. The key is that you are trusting someone with property to benefit someone.
Trusts in some states can last forever. Every state has them last at least 100 years. You can have them end before that though.
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