What role does a trust play in estate planning?

A trust is a legal entity that can hold assets on behalf of a beneficiary. In estate planning, a trust can be used to manage and distribute assets to beneficiaries according to the grantor's wishes.

There are several types of trusts that can be used in estate planning, including revocable living trusts, irrevocable trusts, and testamentary trusts. The type of trust that is best for a person's estate plan will depend on their individual goals and circumstances.

A revocable living trust is a popular option because it allows the grantor to maintain control over their assets during their lifetime while providing for a smooth transfer of assets to beneficiaries after their death. An irrevocable trust, on the other hand, transfers ownership of assets to the trust, which can provide certain tax benefits but may limit the grantor's control over the assets.

Overall, trusts can be a useful tool in estate planning because they can provide flexibility, privacy, and control over how assets are distributed to beneficiaries. However, they can also be complex legal arrangements that require careful consideration and guidance from an experienced estate planning attorney.