October 22, 2007
Posted by wookie
I'm interesting in learning how to setup set up a trust fund for someone special in my life with after-tax money.
I would like to learn how to set up a fund, and avoid having to deal with tax paperwork on the years to come. I would not be surprised to learn if the setup is complex.
Any suggestions? Thanks very much.
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October 22, 2007
Posted by chriscahn
( 2 ratings )
You don't have to be a millionaire to set up a trust fund. Or like I tell my clients, you don't have to be a Rockefeller. Anyone can create a trust for a friend or family.
Three people are involved in setting up a trust fund:1. Grantor, which is also know as a settlor is you. The person who sets up the trust fund
2. Beneficiary, the person, entity, or organization whose name the trust fund is created for
3. Trustee, is the person who is responsible for managing the trust fund. The Trustee can be either an attorney, financial consultant or even a close friend or family member.
Common reasons for creating a trust fund: 1. Avoid the hassles of Probate Court
2. Ensure Desired Management of your Assets
3. Ensure that your family and/or friends are taken care of
4. Tax Savings - Simplify the resolution of estate taxes
The Two Basic Forms of Trust Funds1. Testamentary Fund - Is an After Death fund which is not made available to the beneficiary until the grantor has passed away. The fund is use commonly when a grantor wants to simply take care of a loved one after passing away.
2. Inter Vivos - Is a Living trust which goes into effect while the grantor is still alive.
So Where Do You Get Started?Consult an attorney who is an expert in administration, management, and disposition of estates. You will need a lawyer in all matters concerning how to set up a living trust. This is especially true when it comes to the documentation of a living trust. You may go to an existing bar organization in your locality for a list of good lawyers to handle your concerns. Make sure that your lawyer puts in writing the terms and conditions of your lawyer-client relationship.
This is likely more information than you were looking for however, I always provide all the information with my clients to ensure they get the big picture. If you have any specific questions around a type or aspect of a trust be sure to ask. If you are looking for recommendations in your area, again be sure to ask.
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