Have you heard the expression "you can't have your cake and eat it too?" Do you know what it really means? I don't. But I'm going to use the distinction between "having" and "eating" cake to explain the difference between Trustees and Beneficiaries.
I'm a big fan of trusts. Some of my clients come in not knowing what a trust is. Don't worry, I always help them figure it out, one way or another.
Here's a new explanation that I just thought of.
Simply stated, a trust is a way to decide who "has the cake" and who gets to "eat the cake."
The beneficiary is the person who gets to eat the cake. The property is to be used for the benefit of the beneficiary. The trustee is the person who "has" the cake. The Trustee had better be trusted by the beneficiary.
Say, instead of cake, we have a house. The trustee owns the house. The beneficiary gets to live in it.
The trustee does all the work. The beneficiary has all the fun.
But what if you want to both have your cake and eat your cake, too? What if you want to own your house and live in it?
That kind of trust I call a Life Trust. Everyone should have a Life Trust. That's the Trust that holds your bank account. It might also hold your house, if that is the way you want it. To learn more about the life trust, click here: Life Trust Entry
Still puzzled? Ask a question in the comments below.