A common dilemma in estate planning involves balancing fairness among family members while recognizing the needs of a particular family member. Some examples are:
Unique estate plans can be created to meet each situation. All estate plans will probably involve some form of a trust arrangement. Creative use of trusts are being used more and more in Medicine Hat estate plans.
What is a Trust?
Trusts are not legal entities such as partnerships or corporations. Trusts are about relationships.
A trust has a person or organization holding property (Trustee) for the benefit of others (beneficiaries). The Trustee holds legal ownership of the property. Beneficial ownership, the right to receive the benefits of the property, is held by the beneficiaries. A legal relationship is created between the Trustee and the beneficiaries. The terms of the relationship are contained in the documents creating the trust.
Trusts can be created during one’s lifetime or after death through a Will. The terms of the trust can be drafted to meet the goals of the estate plan. Some terms common to every trust are:
Trusts can be very useful in providing a plan for benefiting one or more beneficiaries. As with everything in life however, there are potential problems if the trust is not properly established. Establishing a trust requires both legal and accounting advice. Tax consequences on transferring property to the trust need to be considered. Potential legal claims of family members (dependant spouse and children) must be understood.
A trust is a useful tool in estate planning. To know more about trusts, contact your lawyer for more specific advice on whether a trust arrangement can help you meet your estate planning goals.