A trust fund is a special kind of estate planning which enables one to grant their wealth to another person who can be their spouse, children, grandchildren or anyone they nominate. A trust fund basically includes a variety of assets, which is not limited to tangible assets, which means bonds, stock investments and cash can all be underwritten as a trust fund. Another difference between a will and a trust fund is that the latter can be revoked at any point.
However, as the property can only be passed on to the heirs after the death of the granter in a will, trust funds go into effect the moment they are signed. To understand more about trusts funds and the role they play in estate planning, it is important to learn about the three significant parties involved in a typical trust fund contract.
The three people described below play the most vital roles in the property distribution arrangement:
The grantor is the one who creates the trust fund by donating a considerable amount of property to the fund. The property can either be physical assets such as real estate, lands, art and any other tangible asset. Intangible or financial assets such as cash, bonds, mutual funds, stock investments, copyrights and even business shares can be donated into a trust fund. The grantor also selects the person who would manage the fund until the time they want it to be distributed.
It is the individual for whom the trust fund was generated with the motive that that the assets donated in the fund will be accessible to the beneficiary. Although the beneficiary can’t directly own the assets, they are still managed in a manner by the trust that it shall benefit the nominated person for the longest time. The grantor has full authority over who they name as a beneficiary and how each heir shall be given access to their trust fund.
A trustee can be either a single person, a group of people or an institution selected by the grantor to handle the trust fund on their behalf. Legal advisors and close family members are the most common people chosen as trustees since the grantor feels more secure having the trust fund in the hands of a legal expert or a close relative. The trustee must religiously abide by the rules documented in the trust and the concerning law.
Estate planning is a very important life decision and must be executed carefully, trust funds are a common type of asset planning that makes sure that the property goes to only the person you want it to. To learn more about how you can create a trust fund and streamline your inheritance process contact Total Wealth Planning in Cincinnati, OH. The expert team of wealth advisors will help you find the perfect solution to your estate planning worries.