The Roman Empire was a powerful force in the world, and its influence is still felt today. The Romans were responsible for many advancements in law, government, and engineering. One of their lesser-known legacies is the development of the trust, a legal tool that is still used today for estate planning.
Why Trusts Were Invented
Around 800 AD, Roman law stated that only citizens of Rome could own property. Because the Roman Empire was constantly engaged in war, land-owning soldiers needed a way to transfer their ownership of land in the event of their death. This uncertainty formed the core of utilizing a trust for estate planning.
The Advantages of Trusts
Today, trusts are used for a variety of purposes, including:
- Protecting assets from claims, creditors, and liabilities
- Transferring wealth to an individual beneficiary
- Controlling the transfer of wealth according to the Grantor’s wishes
- Preserving assets for future generations
- Minimizing taxes on assets passed to future generations
- Maintaining privacy by avoiding probate
The Disadvantages of Trusts
Trusts also have some disadvantages, such as:
- They can be irrevocable, meaning they cannot be changed once they are created.
- They can give beneficiaries the impression of a loss of control over the assets in the trust.
- They can be complex and expensive to set up and administer.
What is a Trustee?
The person who creates a trust is called the grantor. The grantor appoints a trustee to oversee the trust and manage the assets according to the grantor’s wishes. The trustee has a number of fiduciary duties, including:
- Administering the trust according to applicable law
- Ensuring that the trust is administered according to the grantor’s original intent
- Providing oversight of investments and assets
- Making distributions to beneficiaries as specified in the trust instrument
- Educating beneficiaries about the trust
- Maintaining accurate records of the trust’s assets and activities
Conclusion
The Roman Empire may be gone, but its legacy of estate planning lives on. Trusts are a valuable tool that can be used to protect assets, transfer wealth, and provide for loved ones. If you are considering creating a trust, it is important to speak with an attorney to discuss your options.
