What is a Trust?

A trust is a special fiduciary arrangement that allows a third party, known as a “trustee,” to hold assets on behalf of a beneficiary. Trusts are flexible and can be arranged in a variety of ways to specify exactly how and when the assets will pass to the beneficiary. Traditionally, a trust is used for minimizing estate taxes. However, it can offer other benefits and serve as part of a well-crafted estate plan. Trusts typically avoid probate, so the beneficiary can gain access to these assets more quickly than if they are transferred using a will. Assets in a trust that pass outside of probate will also save time, court fees, and potentially reduce estate taxes. Trusts also offer other benefits including:

Giving You Control of Your Wealth – With a trust you can specify the terms precisely, giving you control of when and to whom any distributions will be made. You also have the option of setting up a revocable trust so that the assets remain accessible to you while you are alive, but designate to whom the remaining assets will pass to after your death.

Protection of Your Legacy – A trust can also help protect your estate from your heirs’ creditors or from those who are not good at money management. For example, if you have children you can state that assets in the trust are not accessible until they turn 30 years old

Privacy and Probate Savings – Because probate is a matter of public record, you may be able to protect your privacy with a trust. A trust could allow your assets to pass outside of probate and remain private. This may also reduce the amount of court fees and taxes.

When you are looking for the best way to assign assets to your loved ones, charities or other beneficiaries after your death, we recommend that you speak to a qualified attorney to assess your specific situation.

How Can an Appraiser Help Me Create a Trust?

Real estate appraisals are needed for many situations related to trusts including tax planning purposes prior to death and for settling an estate after death. TCO APPRAISALS has years of experience in providing accurate assessments for your largest assets – real property. We can work with your financial professional to make sure that they get an accurate assessment of your property so that you can move forward in the process.

Are There Different Types of Trusts?

There are many different types of trusts.  Listed below are the most popular trusts each pertinent to specific situations:

Marital / “A” Trust – This type of trust is designed to provide benefits to a surviving spouse.

Bypass / “B” Trust – Also known as the “credit shelter trust,” this type of trust is established to bypass the surviving spouse’s estate so the spouse can receive federal estate tax exemption.

Testamentary Trust – This type of trust is outlined in a will and created through the will after death. Funds are subject to probate and transfer taxes.

Charitable Lead Trust – This type of trust allows certain benefits to go to a charity with the remainder going to your beneficiaries.

Generation-Skipping Trust – With this type of trust, assets can be distributed to grandchildren or later generations without incurring a generation-skipping tax or estate taxes when your children die.

Qualified Terminable Interest Property (QTIP) Trust – This type of trust provides income to a surviving spouse. When the spouse dies, the remaining assets will go to additional beneficiaries who are named by the deceased.

We recommend you consult with an attorney, Certified Public Accountant (CPA) or another financial professional specific to your circumstances. Depending upon your situation they may advise you to get an appraisal for a trust.