how to set up an account in trust
before setting up the account in trust review your available options and choose the one that best suits your needs there are several details to consider beforehand however for example identify who you want to manage the trust and how you want it managed during your life and upon death considering death identify who you want as your beneficiary or beneficiaries and how you want them to receive the assets determine what assets the trust will hold and under what condition they can be disbursed or disposed of once the details are confirmed complete and file the appropriate paperwork according to the rules of your state it might be best to consult an attorney to ensure that the account in trust is established according to your preferences benefits of an account in trustaccounts in trust are preferred by many because they avoid probate enabling a quicker and easier distribution of assets these accounts also may provide favorable tax benefits such as the irs considering income as trust income for irrevocable trusts which usually results in a lower tax liability 5accounts in trust allow the wishes of the donor to be carried out during their lifetime and or upon death they can specify how they want their assets managed how and when they will be dispersed and who will manage them example of an account in trustmr and mrs q sample are school teachers with a goal to retire in 15 years they have three adult children and 2 infant grandchildren hoping to secure their assets and create college funds for their grandchildren they explore accounts in trust as options after meeting with an attorney they decided to protect their assets in a revocable trust whereby they serve as co trustees and their eldest child as a successor trustee their assets including real estate stocks and other investments will be managed in the trust upon death all assets will be distributed equally among their children who are named as the beneficiaries 6they also established education trust accounts for each grandchild initially depositing 5 000 into each account their goal is to invest 2 000 per account each year until the grandchildren reach the age of majority the funds can only be used for educational purposes however if the grandchild does not attend college or trade school the funds will be dispersed in monthly installments beginning at age 25 account in trust faqsif you have assets and specific preferences in how and to whom they are distributed a trust account might be beneficial speak with an expert such as an estate planner advisor or attorney to explore what trust accounts are available and which ones are advantageous for you after deciding which trust account to establish outline the conditions you want to be specified within the trust draft the trust document according to the rules for your state be sure to name the parties trustees to manage the trust as well as the beneficiaries then create an account for and transfer assets into the trust this can be done with most banks and financial institutions before establishing a trust it might be helpful to seek advice and guidance from a professional a revocable trust is a trust in which the terms can be modified or revoked by the grantor in contrast an irrevocable trust is a trust in which the terms cannot be modified or revoked without the written consent of the beneficiaries 7the terms will and trust are often used interchangeably but they are quite different a will is a legal document outlining the final wishes of a person upon their death it is only effective after its originator dies trusts are effective upon their creation trusts can outline how assets are to be treated during the life of the grantor and upon death whereas an executor or executrix is appointed to ensure that a will is executed according to its specifications a trustee is appointed to ensure that the conditions of the trust are met unlike wills trusts are not subject to probate and cannot be contested 87