By: Atty. Curt Ferguson
This article was originally published in the Prairie Farmer. Click here to access.
Sometimes it is good to review basics. I often write about how trusts can be used in estate planning. And for good reason: Planning is all about the future. Estate planning says what you want to happen to your family and your farm with its related assets. Trusts are incredibly flexible tools for holding, controlling, protecting and directing assets into the future. In my mind, they are the Swiss army knife of estate planning.
To understand trusts, let’s first distinguish them from business organizations like limited liability companies, partnerships and corporations. Business organizations are essentially an artificial “person” created under the law. We sometimes call them an entity. An entity can own property. But the entity itself is also something that is owned, such as by its members, partners or shareholders.
So when you think of your LLC, you can ask, “What does it own?” But you can also ask, “Who owns the LLC itself?”
A trust is a different animal altogether. We don’t speak in terms of who owns the trust, like you would ask, “Who owns the LLC?” No one owns the trust. A better way to think about trusts is . . . .
To read the full article, visit the Prairie Farmer webpage here.