When Can I No Longer Maintain a Trust Fund?

A trust is arguably viewed as the more beneficial estate planning tool over a standard last will and testament. However, a common concern with establishing a trust is when and how long you can maintain control over the assets you use to fund it. Follow along to find out when you can no longer possibly maintain a trust fund and how a proficient Putnam County trusts attorney at The Law Office of Andres D. Gil, PLLC can help you better understand its legalities.

When can I no longer possibly maintain a trust fund?

Basically, your ability to maintain control over the assets you place in your trust fund depends on the exact trust type you select. For one, if you established a revocable trust, you may be allowed to add, remove, or modify its terms and conditions throughout your lifetime. This may be for the best if you wish for an estate plan with greater flexibility, especially if your future financial status is rather unpredictable.

Contrastingly, if you opted for an irrevocable trust, you must immediately surrender your authoritative rights over these assets. But this sacrifice may just be the price you pay for the unique benefits associated with this trust type. That is, because you no longer necessarily own the assets you place in this trust, they may be protected from collection activities, certain taxes, and any other external factors that may diminish their value.

What happens when a trust fund can no longer be maintained?

When you no longer hold the right to maintain your revocable or irrevocable trust fund, your appointed trustee must take over. Specifically, your trustee should be an individual whom you trust to manage your assets appropriately until the time comes for them to be distributed to your named beneficiaries.

Now, within the terms and conditions of your trust document, you may maintain control over how and when your assets should be administered to your beneficiaries. With this, you may instruct your trustee to hold onto these assets until your beneficiary reaches a certain age (i.e., usually reaching their 18th or 21st birthday) or achieves a certain milestone (i.e., usually receiving a college degree or getting married). Further, you may direct your trustee to allocate these assets in a timeline (i.e., usually in the form of lump sum payments or incremental payments).

Ultimately, your trust fund ends once all of the assets you have used to fund it have been exhausted. Depending on the amount or value of the assets used, this may happen soon after your unfortunate passing or even decades later.

In conclusion, you must deeply reflect on the gravity of the matter at hand. Once you do, you must drop everything and reach out to a talented Putnam County estate planning attorney at The Law Office of Andres D. Gil, PLLC.