When planning what happens with your estate after your death, you have various options for how you handle the disbursement and management of your assets. One option is to use a trust. According to The Street, a trust is a legal agreement between three parties.
You become the trustor because you create the trust and place property into the trust. The person who receives the assets in the trust is the beneficiary. The third party is the trustee, which is the person who will manage and control the trust until the beneficiary takes possession of the assets.
You may use a trust to ensure that a specific heir receives certain assets. You can also set a trust up to protect a minor child’s inheritance. It is possible to hold assets in the trust after your death until your child reaches the age of your choosing.
You can also use a trust to give to charity or to protect assets from others if you think there may be conflicts within your family. Trusts also can help your heirs to avoid taxes in some cases. If you put all your assets in a trust, you may even avoid probate.
One of the main reasons why people use trusts is that they do not become public upon your death. If your estate goes to probate, then the public can get information about it. A trust provides protection against this public disclosure. If you would rather not let everyone know your personal financial business, a trust can enable you to at least protect some assets from becoming public knowledge.