A trust is an arrangement whereby you, as the grantor or settlor, transfer assets to a trustee who then manages those assets for the benefit of beneficiaries named in the trust document. The beneficiaries may include yourself and other individuals or organizations that you specify.
Depending on your situation and your assets, there may be several advantages to establishing a trust. A trust can:
A living trust is created during your lifetime by a written agreement, as prepared by your attorney, between you and the trustee. A testamentary trust is described and created within your Will, and does not take effect until your death.
Your trustee can be a competent individual who is eighteen years of age or older, or a corporate fiduciary having trust powers, such as a bank or trust company. You can name more than one trustee, called co-trustees.
You may want to serve as trustee for your own living trust for a time. You should also name a successor trustee in case you become incapacitated later. Many people have named JCB as trustee or successor trustee because of our experience and the requirement that we be impartial, considering equally the needs of all beneficiaries.
You can retain control over trust assets. However the type of control you retain may affect the tax consequences of the trust. You can retain the right to withdraw income or principal from the trust at any time. You can also retain the right to amend or revoke the trust at any time.
Generally, if you retain any benefits from the trust, such as the right to withdraw income or principal, or if you retain control over trust assets, or the right to change the trust terms, the trust income will be taxable to you. In this case trust assets also are likely to be subject to state inheritance taxes and federal estate taxes when you die.
In addition to specific terms you desire, you should always:
Since a trust is a legal document, its language can be
complicated . Tax laws that will affect the trust also can be
complex. We recommend that you consult your attorney and
tax advisor before creating a trust. Your attorney is also best
prepared to create the documents you will need to establish
If you are considering naming JCB as your trustee or successor trustee we prefer to review your plans and documents before your trust is completed. You may benefit from this also as we can often make helpful suggestions.
This information is not intended as legal advice. You should consult your attorney regarding your specific situation.