Many people in Minnesota might have heard others talk about creating a trust instead of a will when making an estate plan but they might not really understand what a trust is or how it works. The fact of the matter is that a trust may be even used in conjunction with a will but the trust has some very specific uses and benefits.
As explained by The Motley Fool, one benefit to a trust is that it is almost always private whereas the contents of a will and the probate process are publicly accessible. With a trust, a person who creates the trust is called the grantor or the settlor. This person transfers assets into the trust that is then managed by a trustee. Assets are distributed to one or more beneficiaries per the instructions and type of trust.
According to The Street, a trust may be used to manage a person's assets for their own use while they are still alive but it may also be used to manage the distribution of assets after the grantor dies. There are multiple types of trusts, allowing a person to select the right one for their situation. This includes providing for a special needs child or donating to charitable organizations. Some people may wish to establish a trust to pay for their grandchildren's college educations.
Blended families and families in which deep conflicts exist may benefit from trusts as provisions can carefully outline who should receive what and when to hopefully avoid further rifts.