Wills are arguably the most commonly known tool within an estate plan. However, there are additional options, such as trusts. In fact, they can benefit certain estate holders, depending upon the estate and intended outcomes.
For those who choose to utilize a trust, it is important to note its differences from a will. Whether you are the creator or recipient of a trust, it is important to understand a few key things.
Considering that a trust works to leave certain assets to a beneficiary, the beneficiary has certain rights in relation to a trust. In short, the beneficiary has the right to know about the various things that can affect the trust, such as:
- Financial distributions
- Valuation of the trust
- Other relevant information about the trust
While the beneficiary has additional rights, these are the most common. Beneficiaries may choose to become familiar with the laws of the state to understand their full scope of rights.
Similar to a will executive, a trustee is responsible for the appropriate maintenance and distribution of a trust. The trustee must uphold the duties of the trustee in accordance with the law. If a beneficiary believes a trustee ever mishandles the trust, the beneficiary may request the trustee’s removal through the court.
While trusts allow parties to bypass several of the common court procedures that can accompany the distribution of an estate, there are still certain actions that may warrant litigation. If any of the beneficiaries do not agree with the distribution of the trust, or if the trustee takes issue, it may be possible for the parties to challenge the terms of the trust. If the court sides with the disputing party, the court then adjusts the trust distribution.
Taking time to fully understand these things in regards to a trust can aid estate holders and beneficiaries in determining the best course of action with a trust. It may also be helpful to consult with a knowledgeable attorney, to ensure parties make the best choice for the situation.