The creation of a trust can have a profound impact on its identified beneficiaries. If handled correctly, these estate planning tools can provide financial resources for years to come. The assets contained within those trusts can provide money needed for a beneficiary’s education, a beloved pet’s care, to further a charitable purpose, or provide a beneficiary with some extra cash to spend on whatever he or she desires. Trusts don’t last forever, though, which is why this week we’ll briefly look at how trusts can end and what happens when they do.
There are a limited number of ways that a trust can end. One way, of course, is when the trust’s assets are depleted. If a trust only contains cash and all principal and interest has been distributed to a beneficiary, then the trust has no further purpose and will end. The same holds true when pieces of physical property are held in trust. A trust containing a house, for example, will end when the house is no longer in existence, such as if it is destroyed in a fire or natural disaster.
Another way that a trust can end is if the conditions of the trust are satisfied. Sometimes individuals place assets in trust until a certain event occurs, at which time the assets are released in full. For example, smaller payments may be made from a trust to a named beneficiary with the understanding that he or she will continue to attend school and eventually graduate. Upon graduation, the trust may release all remaining assets to the named beneficiary, thereby ending the trust and its terms.
Trusts are wonderful estate planning tools because of their versatility. There is a trust type to fit just about any need, and each can be tailored to fit the specific facts at hand. Those who are interested in learning more about how trusts may benefit them and their estate should think about reaching out to an estate planning attorney.