A trust is a legal entity created for the purpose of holding, managing, and distributing property for the benefit of one or more persons.
There are many reasons why people opt to set up a trust. Creating a living trust allows the individual to manage their property while they are still alive. In addition to that, it allows a person to nominate individuals to do the same up to and after their death. In doing this using the relevant legal channels and entitlements, it is possible to keep any legal vulnerabilities to a minimum and avoid expensive, time consuming legal processes after death.
Another reason for preferring setting up of a trust is because of the notable advantages it has over making a will. If one simply makes a will, the document and the provisions contained therein are subject to probate, which can see a long and often upsetting delay in the provisions being legally ratified. Moreover, by creating a trust it is possible to remove or minimize the consideration given to inheritance or estate tax also.
The creation of a living trust is something that is considered important when a testator owns more than one piece of property. In the case of an individual who owns two or more houses, each property will be subject to probate in the case of death. This is something which increases the amount of time taken up by probate and which can also result in the loss of value in their estate. By creating a living trust, this step can be minimized and often removed altogether.
By creating a trust it is possible for a testator to nominate a legal guardian for any minor children in the case of their death. This can also allow the testator to specify any provisions for certain points in the life of their child whereupon they will be entitled to any cash or property assets which are held in trust. This step allows parents who do not have long to live to ensure the security of their children after their death.