Trust is a three-party arrangement whereby a trustor delivers property to the other party (trustee) to be held for the benefit of the third party (beneficiary
). A testamentary trust is arranged by a will and arises after the death of the trustor.
What are the benefits of having a trust?
1. Put conditions on how and when your assets are distributed after you die.
2. Reduce estate and gift taxes.
3. Distribute assets to heirs efficiently without the cost, delay and publicity of probate court. Probate can cost between 5% to 7% of your estate.
4. Better protect your assets from creditors and lawsuits.
5. Name a successor trustee, who not only manages your trust after you die, but is empowered to manage the trust assets if you become unable to do so.