Trusts are separate legal entities, like corporations.
Trusts hold assets for you or for the benefit of others.
Assets inside a trust are managed by a trustee who has legal responsibility for managing and overseeing trust proceeds in accordance with your wishes. The trust stipulates how your assets should be managed, and how, when and to whom your assets will be distributed.
Many people think only the wealthy can benefit from trusts. But this is simply not true. Trusts are highly flexible and can provide for an almost unlimited combination of needs, circumstances and objectives.
Because they can be designed to satisfy such specific needs and circumstances, trusts can address the concerns and objectives of most people. These include:
Business owners and other individuals who wish their financial affairs to be private
Unlike wills, trusts can hide assets and their disposition from public scrutiny armed with information from a probate proceeding. For example, a competitor might be able to force the sale of the decedent’s business at a below-market price.
Owners of highly appreciated assets
When highly appreciated assets are sold, a large chunk of the gain may go to taxes. A trust can shelter property from taxes on income and capital gain and thus avoid the tax bite.
Setting up a charitable remainder trust (CRT) provides the grantor with income for life and creates charitable tax deductions.
Trusts offer a method of providing regular income to dependents and the possiblity of tax savings for you. They also offer control through the choice of mandatory or discretionary payments, as you may specify to suit the dependents' changing support, educational and medical needs.
In addition, trusts can provide for the orderly passage of one’s property without the expense, delay, or publicity of probate, and for professional investment management for family members who lack this skill.
Retirees, widows, widowers
A trust can provide a monthly check, freedom from making investment decisions and the burden of bookkeeping details. It can also provide for the management of financial affairs in the event of illness or incapacitation, and tax savings on future gifts to charity.
Spouses in second marriages
A trust can protect the interests of children from a previous marriage, and spare friends and family members from legal conflicts.
Parents of children with special needs
Trusts can ensure that children and others with special needs will have their financial concerns properly addressed.
Individuals concerned about becoming ill
Trusts ensure that their financial affairs will be handled properly. They also handle the obligation of naming a guardian or conservator to oversee these responsibilities.
Unmarried couples and close friends
A trust can provide a "significant other" with income for life while keeping assets in the grantor’s family. Upon the death of the loved one, assets can revert back to a family member or to a specific charity.
Individuals who need help in handling their finances
Trusts can manage the assets and oversee all responsibilities regarding record-keeping and tax preparation for those unwilling or incapable of handling their financial affairs.
A trust can be a highly complex document, so it is wise to seek legal counsel from a knowledgeable Louisiana estate planning attorney (sometimes referred to as a Louisiana trust attorney).