Trusts are estate-planning tools that can replace or supplement wills, as well as help manage property during life.
A trust is a legal arrangement made during life or under the terms of a will by which a property owner (the trustor) transfers legal ownership to a person or an institution (the trustee) for the benefit of another person (the trust beneficiary). The trustee manages the property for the beneficiaries according to the trust agreement. The two principal types of trust are living trusts (inter vivos) and testamentary trusts. A living trust is one that you set up during your lifetime, while the testamentary trust is one created by your will and does not take effect until your death.
Since a trust allows the grantor to specify conditions for receipt of benefits, as well as to spread payment of benefits over a period of time instead of making a single gift, many people prefer to include a trust in their wills to reinforce their preferences and goals after death.
The testamentary trust is not automatically created at death but is commonly specified in a will and so as a will provision, the trust property must go through probate prior to commencement of the trust.
A living trust starts during the life of the trustor, but may be designed to continue after his or her death. This type of trust may help avoid probate if all assets subject to probate are transferred into the trust prior to death.
A living trust may be "revocable" or "irrevocable." The trustor of a revocable living trust can change or revoke the terms of the trust any time after the trust commences. The grantor of an irrevocable trust, on the other hand, permanently relinquishes the right to make changes after the trust is created. A revocable trust typically acts as a supplement to a will, or as a way to name a person to manage the grantor's affairs should he or she become incapacitated. Even a revocable living trust usually specifies that it is irrevocable at the death of the grantor.
Trusts avoid probate only if all or most of the deceased person's assets had been transferred to the trust while the person was alive. To allow for the possibility that some assets were not transferred, most revocable living trusts are accompanied by a "pour-over" will, which specifies that at death, all assets not owned by the trustee should be transferred to the trustee of the trust.
Why Should You Have a Trust?
- Protecting Property for Certain Beneficiaries
- Reducing or Eliminating Estate Taxes
- Managing Property upon Incapacity
- Avoiding Probate
- Avoiding a Will Contest
- Living trusts are private; they don’t get filed with the probate court
Trusts have important tax, governmental assistance, probate, and personal ramifications, so an experienced Arkansas Trust Attorney should be consulted at all stages of the process, from preliminary discussions to execution of trust documents.
At Lauro Law, PLLC we will use our knowledge of Arkansas Trust Law and our experience to answer your questions and assist you though the Trust process.
At Lauro Law, PLLC we take a special interest in every case and we will:
- Explain the entire Trust process and how we will facilitate that process
- Explain your rights and responsibilities
- Provide you with appropriate data and information gathering questionnaires
- Provide advice and guidance for methods of distributing your property and assets
- Provide drafts of the Trust to insure your satisfaction
- Prepare the final Trust and supporting documents (such as a Pour-over Will)
- Host the Trust signing
- Notarize the Trust and related documents
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