A trust account is a type of legal arrangement that is opened by an individual and managed by a third party (trustee) for the benefit of a third party (beneficiary) in conformity with the agreed-upon terms. There are several types of trust accounts and each has its own purpose. As a business specializing in estate planning storage, we will discuss what you need to know about trust accounts:
- Why do people create trust accounts?
There are several reasons why people create trust accounts. Generally speaking, trusts are created to maintain control of their assets in the event of incompetence, such as a decline in mental or physical health. Trusts also help save on estate taxes and prevent probate. When you store digital assets while considering your trust account, you can establish and maintain control over your assets even after death.
- What are its components?
Trust accounts contain four main parts which include the grantor, trustee, principal, and beneficiary. The grantor or trustor is the person who creates the trust while the trustee is the person or entity that agrees to hold the assets. Moreover, the beneficiary is the person who ultimately receives the assets stated in the trust while the principal pertains to the assets themselves.
- How are trust accounts funded?
Trust accounts like testamentary trusts are typically funded after your passing using the assets of your estate. To fund it, the language in your will must state that all your estate assets will be moved into your trust account after death.
Secure your assets – web-application in Chicago, Illinois through Life Snapshot®, Inc. today. Browse our site or get in touch with us to learn more about our process and services.