What it is:
How it works (Example):
Let's say John Doe dies this. He is a decedent. His and trust enabled him to direct what happened to his possessions and his . The legal proceedings associated with settling his refer to John Doe as the decedent.
Why it Matters:
From a financial perspective, decedents don't stop existing after they die. Their estates still have to file afor the in which the decedent died, for one thing.
Establishing a trust often reduces estate taxes because it allows a person to transfer legal title of his or her property to another person while he or she is alive. It also gives the trustee (the person acting on behalf of the decedent) the authority to distribute assets immediately to the beneficiaries based on the of the trust. No court is involved, so there are no probate fees and no public record of the value of the estate. Many financial advisors urge clients to have trusts, especially those who live in states where probate fees are especially high or if the client owns a home or . Trusts are not for everyone, however, so it is important to seek proper financial advice.