People in Minnesota considering the distribution of their assets and properties after death often consider the use of a trust when devising gifts to minor children and other young people. The estate planning process can include the use of a range of instruments, including wills, trusts, insurance policies and non-probate transfers, in order to transfer an estate to beneficiaries. Trusts can be an important part of an estate planning strategy: Because they involve trustworthy and often professional management, they can help secure assets and ensure that they are not wasted.
While trusts are often considered as an estate planning answer for gifts to minors, they are less frequently used for gifts to adults, including grown children and other beneficiaries. Because minors cannot sign contracts or manage their own funds, a trust is necessary; however, many of these trusts provide full control to beneficiaries at an age older than 18. In the same way, trusts can be a valuable way of making a gift to adult children that works to protect assets and prevent them from being squandered or poorly used.
By setting up a trust that disburses only investment income each year, a person who leaves behind a substantial estate can ensure ongoing income for their beneficiary. This helps protect their heir in case they are prone to spending inappropriately or excessively. Trusts also help to ensure that the gift remains separate property in a divorce, and the funds in the trust are out of reach of creditors of the beneficiary.
People who are thinking about the financial future of their family might consult with an estate planning attorney about drawing up the necessary documents, including wills and trusts. A lawyer may provide advice about structuring an estate plan in order to preserve and protect assets and the interests of the testator and beneficiaries.