Trust one of many tools lawyer uses to manage, transfer property
By Chesley Payne
A trust is an often-used legal agreement in which property is transferred by an owner, or trustor, to an individual, usually called a trustee, who holds the property for the benefit of the same or another party known as a beneficiary.
A trust can be formed while a person is living (living trust) or after a person is deceased (testamentary trust). A testamentary trust is usually formed in a person’s will to hold property for the benefit of certain beneficiaries. A trust can also be revocable or irrevocable. A revocable trust can be revoked by the trustor after formation. An irrevocable trust cannot be dissolved after it’s formed unless the beneficiary agrees.
A trust can also be used to avoid probate by placing the assets in the trust prior to death and allowing the trustee to manage the property for the benefit of certain beneficiaries.
This was done more often in the past to avoid estate taxes. However, as the current estate tax only begins if a person has assets of $5.34 million or more (for 2014), this option isn’t used as frequently.
A trust can be useful to hold property for the benefit of a minor, as a minor is not able to buy and sell property until the minor reaches the age of majority. In Alabama, this is 19 years of age.
In short, a trust is one of many tools a lawyer has at his or her disposal to manage and transfer property. Speak with the attorney of your choice to determine what options best fit your situation.