When planning out your estate, you may find a will isn’t enough to help secure and distribute your assets. Assets in a will, after all, have to go through the probate process and may include estate taxes. Instead, you’ve considered creating a trust.
Yet, there isn’t just one trust to pick from, and each trust may benefit you differently. To better understand what trust you need, you should consider your options. Here’s what you should know:
Revocable living trust
You may have a trust created during your life called a living trust, which can be altered or reversed at any given time. A living trust that can be voided during your life is considered revocable. Likewise, you may have assets added or removed during the existence of a revocable living trust. Once the grantor passes away, the revocable living trust becomes irrevocable and can’t be altered, preventing anyone from altering it thereafter.
The existence of a revocable trust created during your life implies that you can create an irrevocable trust. An irrevocable trust, as mentioned above, can’t be altered or revoked. This can ensure the terms of a trust aren’t changed later in life.
Some people want their estate (or a portion of their estate) to go to a charity. To ensure this happens, grantors may create a charitable trust that ensures assets are sent directly to a charity without delay or taxes. One such charitable trust may give a charity regular payments during the grantor’s life and the rest of the assets on a later date after the grantor’s death.
While you can’t give your pets your estate if you die, you may be able to set aside assets so that your pet is continued to be supported. In a pet trust, you may designate someone to care for your pet, while assets are distributed for your pet’s needs.
If you’re still not sure what kind of trust you need, you may need to consider reaching out for legal help.