Trusts are one of the most flexible and powerful estate planning tools available. They can help families avoid probate, protect assets, and even provide detailed instructions for how property should be used by future generations. Here are some common questions clients ask about trusts in Minnesota.
What is a trust?
A trust is a legal arrangement where you place property or money under the management of a trustee for the benefit of your chosen beneficiaries. The trustee follows the rules you set in the trust document, making sure your wishes are carried out. Trusts come in many forms, but most are either revocable (can be changed) or irrevocable (more permanent).
Why would I use a trust instead of just a will?
While a will takes effect after death and generally requires probate, a trust can operate during your lifetime and after your death. Trusts can:
- Avoid probate, saving time and court costs.
- Provide privacy, since wills become public record while trusts usually do not.
- Allow for more control, such as staggering distributions to children at certain ages.
- Offer potential tax benefits in some circumstances.
Can a trust help keep a family property, like a vacation home, in the family?
Yes. This is one of the most common reasons families create trusts. A trust can lay out clear rules for who may use the vacation home, how maintenance and expenses will be covered, and how ownership is passed down. By putting these instructions in writing, you reduce the risk of family disputes and make it easier to keep the property in the family for generations.
Do trusts help with estate taxes in Minnesota?
Some types of trusts can help reduce estate taxes, though Minnesota’s estate tax threshold may or may not affect your situation depending on the size of your estate. Even if taxes aren’t your main concern, trusts can still be very useful for managing how and when your assets are distributed.
What’s the difference between a revocable and an irrevocable trust?
A revocable trust can be changed or revoked during your lifetime. It offers flexibility and is often used for probate avoidance and management of assets. An irrevocable trust cannot usually be altered once created, but it may provide stronger asset protection and tax advantages. The right type for you depends on your goals.
Do I lose control of my property if I put it in a trust?
Not necessarily. With a revocable trust, you usually serve as your own trustee, which means you maintain full control over your assets during your lifetime. You simply designate a successor trustee to step in if you become incapacitated or after your death.
How do I know if I need a trust?
Not everyone does, but if you own real estate, have young children, or want to avoid probate, a trust may be a good option. They’re also a strong choice if you want to leave clear instructions for how assets should be used, or if you own property in more than one state.
Talk to Sheila Kelly About Setting Up or Managing an Existing Trust Trusts can be as simple or as sophisticated as you need them to be. Whether your goal is to protect your family home, simplify the probate process, or provide for loved ones in a thoughtful way, Sheila Kelly can help you explore your options and create the right trust for your situation.
