How much inheritance do you want to hand over to your son, daughter, friend, wife, family, Neighbour, colleague etc? Decisions regarding assets is a very personal choice and has to be made by you during your lifetime. Just get an attorney and make a trust so that the gifted estate and investment assets are handed over to the person chosen by you smoothly after you pass away.
When a person has some assets and properties that he or she wants to hand over to a third person or a beneficiary, then legally the property can be held safe by a trustee in a trust till the correct time of handover arrives. The assets stay protected for the future and the details are mentioned in a legal document called a trust deed. The details of the operation of trust, trustee, grantor etc are mentioned in this trust deed. The trustee manages the trust that holds finances, assets, businesses, investments, bonds and properties.
There are two types of trusts that people prefer mostly:
Revocable living trusts
Irrevocable living trusts
Both the trusts come into effect during the grantor’s lifetime but they differ a little. The irrevocable trust are documented as the final decision and they can’t be changed or terminated after they are legally formalised. The trust comes into effect the moment it is created and all the formalities regarding it are completed during the lifetime of the grantor. There are two salient features of the irrevocable trust:
The trust is made when the grantor is alive, It is unchangeable and cannot be modified, amended or revoked
The irrevocable living trust can help reduce the estate tax liability if the owner relinquishes any right and control over the estate and assets put into the trust .The assets that are handed over to the trust remain in it irreversible and permanently till the correct time to hand them over to the beneficiaries arrives.
The probate complications that can creep up later are also considerably lessened. You have to make the decision after lot of brain storming, as there is no way you can change your decision. The terms of the trust stand unchanged and un-cancelled at any time.
To change the terms of the trust a state court or judiciary with appropriate jurisdiction has to be approached. The trust may actually take effect at death but it is documented during the grantor’s lifetime.
Trust modification is possible if there are certain extenuating circumstances that can lead to an amendment. If there is some kind of judicial or Federal law change, then a modification can be made.
If the trust goes out of date then it can be terminated or modified according to the terms of the trust deed.
Normally trusts have a trust protector. The circumstances and facts demanding the change can be looked over by this person who has personally been chosen by the court, beneficiary or trustee and then the decision is made by him.
If the property of the trust is sold or if the investment becomes null and void because of incomplete payment of instalments or premiums, then the assets will slowly diminish and trust will be terminated.