Trusts come in a wide range of types the wide range of situations that can arise, during life and after death. A person who makes a trust is known as a grantor, settlor, trust maker, or trustor; those who benefit from trusts are called beneficiaries. A trust administration replaces a probate however, this administration is done without the probate judge, endless court hearings, newspaper publication of the notice of death, public disclosure of the decedent’s inventory, and frequent uncontrollable delays.
Reasons Grantors Create Trusts.
Probate avoidance is not the only reason trust is created. For example, an A-B Trust, while a probate avoidance tool, is also a tool for saving dollars that would be lost to taxes. In today’s civil society privacy and security are greatly valued. A trust is a private legal instrument that is not recorded in the city or county where the decedent resided at the time of death. Among the many reasons to create a trust is making certain that the estate tax exclusion is protected on the death of the first spouse. Protecting that exclusion is prevents up to $11.7million from being subjected to the estate tax. Trusts adds protection for beneficiaries of blended families and can secures the deceased spouse’s distribution for children from the earlier marriage(s).
Trustees Duty in Administration
Trust creators or grantors are often the first trustee(s) to administer their trust for their benefit and/or that of their beneficiaries. However, it is the Successor Trustee who will be charged with continuing the administration of the trust and distribution of trust assets. Therefore, your trustee must be willing to faithfully administer the trust as written, even if they disagree with some of the grantor’s instructions. The trustee must also be humble enough to seek professional assistance when instructions are difficult to understand or carry out.
