1021 Fleming Street, Ste. A, Garden City, KS 67846

Phone: (620) 277-3315  |  Fax: (620) 277-3310

Trusts

“Die and endow a college or a cat.” -- Alexander Pope

To continue an analogy from the splash page, if estate planning is for Thurston Howell III, then trusts are the reason why it is needed. In the popular imagination, trusts are shadowy things that exist to allow the obnoxious – and obnoxiously wealthy – to live the high-life without doing a thing to earn it. Or, alternatively, as a vehicle for eccentric socialites to allow their pets to eat better than their children, whom have been disinherited entirely.

While each perception contains a kernel of truth, trusts are also much more utilitarian. A trust is a legal fiction – similar to a corporation – which is a distinct legal entity that is established by a grantor and is empowered to receive, hold, and maintain assets for one or more specifically enumerated purposes, subject to any lawful restrictions the grantor sees fit, and to do so for the benefit of one or more individuals. A trust is administered by a trustee, who is obligated to attempt to fulfill the purpose(s) of the trust for the benefit of the beneficiaries. The trustee and/or beneficiary of a trust may also be the same individual as the grantor.

Trusts are important for estate planning purposes because they are a non-probate alternative. What this means is that, while a will must be filed with the court to be operative, a non-probate alternative does not, and can transfer property without need for judicial intervention. Because the trust owns the relevant estate assets rather than decedent, those assets can continue to be maintained by the trust indefinitely. Or, as is more likely for estate planning purposes, the instrument which created the trust contains provisions for the distribution of trust property after the grantor’s death.

Notwithstanding such, trusts are not a one-size-fits-all estate planning solution. They require significant investments of time to establish properly, as a full inventory of the property that is to be transferred to the trust must be compiled, and then follow-through must be done to ensure all of the assets are timely conveyed to the trust. A continuous effort must be made as well to ensure all property that a grantor wishes to be trust property in fact is transferred to the trust. Trusteeship also carries significant obligations and, potentially, the need to keep beneficiaries informed about the management of the trust and any changes which have been made to it. Trusts are, then, best thought of as useful tools, with their own strengths and weaknesses, which are to be used as part of a more comprehensive estate plan to achieve an individual’s planning goals.   

Like wills, trusts are a tool that must be completed by others in support of a broader estate plan. Since 2013, the Law Office of Christopher J. Velez has been helping individuals and families in Southwestern Kansas to successfully craft estate plans to help them achieve their goals. And would like the chance to help you do the same.

Call (620) 277-3315 to find out what the Law Office of Christopher J. Velez can do to help determine if a trust is an appropriate tool when planning for your future.

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