Setting Up a Standby Trust
A standby trust is a useful estate planning tool that offers flexibility and future control over your assets. Here's a breakdown of what it is and how it works:
What is a Standby Trust?
A standby trust is essentially a dormant trust that comes alive upon the occurrence of a specific event. You, the person setting it up (grantor or settlor), establish the trust but don't necessarily transfer assets into it right away. The trustee you appoint manages the trust, but they are essentially on standby until the designated event triggers.
Benefits of a Standby Trust
Flexibility: Assets go into the trust only when the triggering event happens, allowing you to maintain control during your lifetime.
Trigger for Different Situations: You can design the trust to activate upon various events, such as death, mental incapacity, or a specific date.
Controlled Distribution: The trust dictates how and when the assets are distributed to the beneficiaries, ensuring responsible management.
Potential Asset Protection: Assets in the trust may be shielded from creditors or probate challenges depending on your jurisdiction.
How to Set Up a Standby Trust
Setting up a standby trust involves several steps:
Consultation with an Estate Planning Attorney: An attorney will guide you through the process, ensuring the trust meets your needs and complies with local laws.
Identifying Assets: Decide which assets will eventually go into the trust.
Choosing a Trustee: Select a trustworthy and capable person or institution to manage the trust.
Defining Triggering Events: Determine the specific events that will activate the trust and transfer of assets.
Specifying Beneficiaries: Name the individuals or entities who will receive the benefits from the trust.
Trust Document Creation: The attorney will draft the trust document outlining all the details and terms.
Things to Consider
Cost: There are legal fees associated with establishing the trust.
Tax Implications: Seek professional advice on potential tax consequences related to the trust.
Updating the Trust: Review and update the trust periodically to reflect changes in your circumstances or desires.
Remember, this is just a general overview. Always consult with a qualified estate planning attorney to discuss your specific situation and determine if a standby trust is the right option for you.
How Bestar Trusty can Help
Bestar's services is helpful in setting standby trusts up. Here's how Bestar could assist:
Standby Trust Formation: Bestar has experience with standby trusts. They could help with the initial groundwork and understanding the general trust formation process. We could help draft the legal documents for your standby trust.
Consult Bestar Trusty: We can guide you through the entire standby trust creation process, ensuring legal compliance and tailoring the trust to your needs.
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