Property Titling And Transfer - Trust Ownership
A trust is a legal arrangement in which a person, called a grantor, establishes a trust arrangement and transfers assets to the trust for a person, called the trustee, to control and manage the property for the benefit of the beneficiaries. The grantor no longer holds a legal title to the property, the trustee now holds the legal title. The grantor can also sometimes be named the trustee (depending on the type of trust).
The main advantage of a trust is that that it will usually avoid probate. Other advantages of a trust include:
· A will becomes public after the property owner dies. However, a trust stays private. Only the beneficiaries and the trustee are informed of the trust. A trust may be less likely to be contested since it's not public. · A trust has the advantage of being more flexible than a will. This ability can help people who have complicated relationships. An example is someone who has many children from multiple marriages.
· A trust doesn't have to transfer all the property at once. It has the ability to transfer property over time. A parent could set up a trust to take care of the bills of a disabled child without burdening them with all the money at once. Also, a parent may not want to give a large amount of money to a young child, teenager or even a young adult, since the child doesn't have the maturity to handle the money. A trust can transfer enough money a month to live on until the child reaches adulthood or can handle it.
· A trust may be used to avoid estate taxes. These taxes can be quite high but with proper planning, these can be substantially minimized.