The ways that a trust may end
Some people in California may wonder what a trust is and what happens when it ends. A trust is one way that a person can arrange for assets to be managed even if they are not around to do so. This person, known as the grantor, chooses a trustee to manage the assets. The person who benefits from the trust is the beneficiary. A document, known as the trust instrument, explains the rules of the trust.
A trust may end in several different ways. The grantor may have specified either certain conditions that will bring an end to the trust or may specify a date. A condition might be reaching a certain age or educational milestone. A trust may also end when there are no more assets in the trust. All of the assets might be paid to the beneficiary. If the asset is something like a house and it is destroyed, then the trust might also end.
A grantor may leave directions about what should be done with any assets remaining in a trust on its end. If this is not the case, then the beneficiaries and the trustee must work together to decide what will become of the assets. Consulting an attorney may be helpful for anyone with questions about their rights.
Trusts have a number of uses in estate planning, and they are not only a way for wealthy people to continue protecting that wealth. For example, if a relative is disabled and receives benefits, a trust may be one way of providing support without affecting eligibility for those benefits. A person might also consider using a trust instead of a will to pass on an inheritance to a beneficiary who is irresponsible with money. With a trust, assets can be distributed according to a set timetable or at the discretion of the trustee.