What is a trust? A trust is an agreement between the owner of property and the trustee. The owner transfers certain property into the trust, and the trustee administers the property according to the terms of the trust on behalf of the beneficiary.
Unlike a will, a trust takes effect as soon as it is executed, and the trust will continue on after the death of the person who set it up. However, in the beginning, a trust is like an empty box. Property must be transferred into the trust in order for the trust provisions to apply.
Trusts can be useful to address a wide variety of situations. Some of the most common include that care of minor children, or elderly or disabled persons requiring care, and when one or both spouses has children from a prior marriage. They also can be useful for tax planning and charitable purposes when assets are extensive.
Once the trust is funded, the property held by the trust will be administered by the trustee according to the provisions of the trust agreement, rather than going through the probate court. Having the trustee administer the assets rather than the court can potentially save time and costs, compared to a will. If you have questions like, “What is a trust?” you’ve come to the right place in talking to Windy City Legal. Let our estate planning attorneys guide you through every facet of trusts, wills and other relevant instruments.