How Do I Set Up a Trust?

Estate planning is important for everyone, regardless of their age or health. It’s an excellent way for young parents or elderly grandparents to ensure their family’s future is protected after they’re gone. No matter what stage of life you’re at, estate planning is an effective way to manage your assets, ensure financial stability for your beneficiaries, and minimize the taxes associated with your assets.

If you’re considering estate planning in Mississippi, The Law Offices of Rusty Williard can help. We can find the best method of transferring your assets to the people you love so they receive them quickly, confidentiality, and with the least amount of obligations or hassle. To do that, we recommend that you set up a trust, in addition to your will, and put assets into it while you’re still alive.

This article will dive into how trusts work and what they can be used for, as well as how our estate planning attorney can help you set one up. If you need specific advice tailored to your financial needs, call The Law Offices of Rusty Williard today.

Understanding the Basics of Trusts

A trust is a legal arrangement where one party (the grantor) gives another party (the trustee) the right to hold property or assets for the benefit of a third party (the beneficiary). This is often done to protect assets while children grow to adulthood, but there are several other benefits as well.

For instance, trusts can come with specific instructions on how beneficiaries can receive and use assets. These wishes are followed both while the grantor is alive and after they pass away.

If you’d like to set aside assets for a granddaughter’s wedding, those assets will remain protected and ready for use regardless of whether you live to see the big day. If you’d also like to set her up with a college fund, the trust can include instructions that the money it contains can only be spent on tuition and supplies.

The Types of Trusts in Estate Planning

  • Revocable Trusts: Often called living trusts, these are created during the grantor’s lifetime and can be altered or revoked at any time. This flexibility is beneficial if your circumstances or intentions change later in life.
  • Irrevocable Trusts: These trusts cannot be modified once they are established without the permission of the beneficiaries. They offer better protection from creditors and can provide several tax advantages.
  • Other Types of Trusts: There are also more specialized trusts, like charitable trusts, special needs trusts, and spendthrift trusts, which are each designed to address specific situations or needs. If your circumstances require these special trusts, your estate planning attorney will recognize the situation and advise you on them further.

How to Set Up a Trust

  1. Determine Your Goals: Before setting up a trust, understand the common reasons they’re used in estate planning. They can be used for controlling your wealth after you die, reducing the estate taxes your beneficiaries must pay, or providing for your children or grandchildren both now and after you’re gone. When you meet with your estate planning attorney at The Law Offices of Rusty Williard, he’ll begin by setting up your will. Any of your wishes that are too complicated for the Will’s simplistic design will be covered by one or more of the available trusts.
  2. Choose the Type of Trust: Based on your goals, decide whether a revocable or irrevocable trust suits your needs best. There are also more specialized trusts for specific situations. Your estate planning attorney will advise you on all of your options and find a path that meets your needs.
  3. Draft the Trust Document: This is the crucial step where you outline the terms of the trust, like the trustee’s powers, the rights of the beneficiaries, and how the assets will be managed and distributed. Our estate planning attorney will help you avoid common pitfalls and ensure the trust complies with federal regulations and Mississippi laws.
  4. Select a Trustee: Choosing the right trustee is very important. It can be a family member, a trusted friend, or an experienced estate planning attorney at The Law Offices of Rusty Williard. The trustee should be reliable, financially intelligent, and unbiased.
  5. Fund the Trust: Transferring assets into the trust is known as funding the trust. These assets can include bank accounts, real estate, investments, jewelry, and other property. The key is to put the title or legal ownership of the asset in the trust’s name. So, if the title on your car currently reads as “Owner: John Doe,” you’ll need to change it to “Owner: The Irrevocable Living Trust of John Doe.” This is just a simplified example, but it conveys the general idea of how trusts work.

Managing and Maintaining a Trust

The trustee manages the assets according to the terms of the trust, which includes investing assets and making distributions to the beneficiaries. The job involves keeping accurate records, managing taxes, and updating the beneficiaries on any changes.

Trusts have unique tax rules and requirements, and irrevocable trusts may be subject to different taxes and obligations than revocable trusts. It’s important to talk with your estate planning attorney until you’re familiar with the various types of trust taxation. Also, if your circumstances change, so might the specifics of your trust. Regularly reviewing the trust with your estate planning attorney will ensure it continues to meet your needs and comply with all current Mississippi laws.

Call the Estate Planning Attorney Mississippi Trusts: Call The Law Offices of Rusty Williard

Setting up a trust is an important financial decision that requires careful planning and ongoing management. By understanding the types of trusts, selecting the right trustee, and ensuring the trust is properly funded and maintained, you can provide for your family now and in the future.

The Law Offices of Rusty Williard has helped Mississippi residents with their estate planning needs for decades. We can help you draft a will and establish a trust that protects your assets as well as the people you love. Call our Brandon, MS office today at (601) 824-9797, and let us bring you peace of mind about your family’s future.