What is a Trust Company?

trust company

If you’re considering putting property in a trust, you might be wondering what the benefits and drawbacks are. This guide aims to help you understand the differences between establishing trust and writing a will, particularly when it comes to your property. But, if you already have a will, do you really need trust? Let’s start with why having both is beneficial.

Many people believe that if they have a will, they don’t need trust. This is incorrect. This isn’t always the case, though. While both a will and a trust are legal documents that outline what you want to happen to your assets.  Furthermore, your loved ones will likely have to attend multiple court dates, implying that they will have to pay for the court process both in terms of time and money.

What is a Trust Company?

A trust company is a legal entity. It acts as an agent or trustee. It works for trust on behalf of a person or business. A trust company is in charge of asset management. It does management and eventual transfer to trustees. Such companies handle trusts, estates, custodial arrangements. These companies work for asset management. At the same time, it performs as a manager to stock transfer. Trust Company work for a profit. Additionally, it charges on an annual basis. Or it deducts upon transfer to a beneficial third party.

The law defines “trust” as:- A corporation formed for the purpose of managing property set aside to be used for the benefit of individuals or organizations.

Why would you put your property in a trust?

When you die, a trust will protect your loved ones from the probate process. Placing your home in a trust will protect your children or spouse from the high costs of probate. It can cost up to 3% of the value of your asset. So, if you own multiple properties, such as a vacation home. Your family will have to deal with the laws and fees of the small claim in each state. It will be in the case if you leave them in a will. This also means they’ll be in charge of finding attorneys in each state and spending time traveling between court dates.

Creating a Trust

However, when you create a trust, you will work with an attorney during an estate planning meeting.  And the trust will take care of your family and assets. But it happens; they’ll be taken care of without having to spend time or money in court to get what you left them. Therefore, keep in mind that the amount of information you can add to your trust isn’t limited. You should put any high-value assets you own into a trust, including:-

  1. Copyrights and patents
  2. Stocks and bonds are two types of investments.
  3. Antiques or works of art
  4. Metals of great value
  5. Antiques and collectibles (cars, coins, stamps, etc.)

But before you start building your own trust, you’ll have to choose between two different types.

Types of Trust

You can choose between two types of trusts:-

  1. Revocable (or living) trusts are trusts that can be changed at any time.
  2. Irrevocable trusts are trusts that cannot be revoked.

An irrevocable trust, as the name suggests, cannot be revoked or changed. So if you change your mind, you won’t be able to remove items or even dissolve them. On the plus side, because an irrevocable trust does not include the value of your estate at the time of your death, it can save you money on taxes. As a result, it’s a wise long-term strategy.

On the other hand, if you choose a revocable or living trust, you can add and remove assets whenever you want. If your circumstances change, you can also completely dissolve the trust determining which option is best for you.

When you should consider getting a trust

There is a time and a place for wills and trusts. For smaller assets, such as your grandmother’s old dining room furniture, a will is ideal. However, if you have more valuable assets, such as a home, vacation property, or investment portfolio, a trust may be a better option than a will.

Conclusion

Placing your home in a trust will protect your children or spouse from the high costs of probate. When you create a trust, you will work with an attorney during an estate planning meeting. The trust will take care of your family and assets without having to spend time or money in court to get what you left them. You can choose between two types of trusts: living trusts and trusts that can be changed at any time.  The law defines “trust” as a corporation formed for the purpose of managing property. Irrevocable trusts are trusts that cannot be revoked or changed. An irrevocable trust does not include the value of your estate at the time of your death. It can save you money on taxes and is a wise long-term strategy.

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