Trusts-please help me understand them

[Mary Jay]

Can you please help me figure out trusts?

1) Trustee is the person who owns an assets and deeds this asset to the trust. Correct? So for simplicity, lets say there is a single family house that is paid off and it produces 1K per month, that I deeded to the trust

2) Trustee is the third party, non related to me. So, lets say I die, and want my child to get this 1k per month, then this trustee makes sure that happens. Trustee could be my attorney, could be a CPA, could be my neighbor, anybody who I trust but that person/entity does NOT own that asset/property, correct?

3) Beneficiary would be in this case my kid, who is collecting the 1K rent from the asset that the trust holds, correct?

4) When I file trust , I do not have to disclose the addresses or names of trustee/beneficiary/trustor, is that correct? Whose name do I absolutely have to disclose to the general public/assessors office?

Thank you!

[Bob Floss II]

 @Mary Jay

1. The Settlor creates the Trust and is often the beneficiary of the Trust.

2. The Trustee doesn't own the Trust, but has extensive powers granted by the Trust document depending on the type of Trust you are creating. A trustee can be easy to replace or extremely difficult to replace. It depends if they are just holding property or if they have a more difficult task like presiding over funds for your minor children when you pass.

3. Typically the current owner of the property is also the beneficiary of the Trust. If you want to transfer to family members, you can do an assignment of beneficial interest in the Trust, but please know this can create a gift and a considerable taxable event.

4. You typically put the Trust as the name for the Treasurer/Assessor, etc and the address is the address you want used for the Trust. It could be your house, attorneys office, whatever. I wouldn't recommend using the Trustee's name.

You need to sit down with an attorney to create your Trust. You are dabbling in an area that can cause serious implications later in life or inadvertently create a huge tax bill for one of your family members.