How does a trust work?
While creating a trust can be complicated, depending on how complex your personal financial situation is, the basic workings for one are pretty straightforward. A trust is made up of:
The settlor: This is the person who creates the trust.
The beneficiares: The person or people who will inherit the assets in the trust.
The trustee: This is the person or people who hold the assets until the trusts’ conditions are met. Think of them as temporary guardians.
Trusts are most often used to take care of children or grandchildren. They also have the added benefit of skipping the probate process (the official proving of the will), which can often be time consuming.
As explained in previous section, most people have the option of setting up their own will. This is not the case with trusts, and we advise strongly that you get expert advice from an attorney.