A trust is
an entity recognized by Utah law to hold and manage assets. The assets of a trust are managed in accordance with the
written terms of the trust, which can decide who receives assets from the trust and the timing of distributions. The
person managing the trust is called a trustee. The position of a trustee is a voluntary
position (whether paid or unpaid), so it is important to ensure that designated trustee is willing to serve in that capacity.
The person creating the trust is called the settlor, grantor,
or donor. Intended recipients of trust funds are referred to as either beneficiaries, grantees,
Trusts can either be created during the life of the settlor or
even upon the death of the settlor. A trust created during the lifetime of the settlor is referred to as an inter
vivos trust. Trusts created upon the death of the settlor are referred to as a testamentary
trust. Inter vivos trusts may consist of either revocable trusts or irrevocable trusts.
Revocable trusts are trusts where the settlor can have a change of mind and remove assets from the trust at will. Irrevocable
trusts simply mean that once the settlor has transferred assets to such a trust, those assets cannot be removed from the trust
except as set forth in the trust document.
Trusts can be very simple or very complex. In the estate planning
field, there are many types of trusts used.
There are multiple benefits that trusts can offer as opposed to other estate planning tools. These benefits include:
1. Privacy — keeping your assets and the distribution thereof out of the public record.
Avoiding or minimizing taxes on some estates and benefit from tax planning.
3. Avoiding probate and contests
to the will.
4. Providing for temporary or permanent incapacity in a desired manner.
Facilitating the transfer of real estate (real property) in another state.
6. Safeguarding trust assets from
creditors and lawsuits.
7. Protecting heirs.
8. Anticipating subsequent marriages / remarriage.
9. Avoiding interruption of investments and investment strategies.
10. Controlling the future of
11. Providing for extreme flexibility in managing assets.
A trust may not be needed by everyone. Those who would likely not benefit from a trust are those with small estates
and where heirs are likely not to fight over the assets. In that case, the cost of probate may be less than the cost
of a preparing a trust (although Court Costs just seem to be skyrocketing). Keep in mind that life insurance
can become part of the estate. If you have a lot of life insurance, your estate could be larger than you had
anticipated. Trusts can be used for almost anyone, however, they simply may be more horsepower than you need your engine
to have. Nevertheless, it is nice to have the horsepower when and if you need it.