Creating a trust as part of your estate plan is a great way to ensure that your assets are distributed the way you want after you die. But, with so many different types of trusts available, it can be difficult to decide which one is right for you.
In this blog post, we will discuss the different kinds of trusts and help you figure out which one is best for your needs.
The various kinds of trusts
A trust is a legal arrangement in which one person (the trustee) manages property or assets for the benefit of another person (the beneficiary). There are many benefits to setting up a trust. They can help to protect assets from creditors, lawsuits, and estate taxes. Many people establish trusts to provide for loved ones who are minors or have special needs.
There are numerous different types of trusts. A few include:
- A living trust allows you to control how your property and assets will be managed in the event of your death or incapacity. Unlike a will, a living trust takes effect immediately.
- A testamentary trust is created by a person’s will and doesn’t come into existence until the person dies.
- A charitable trust is for the purpose of providing financial support to a charitable organization.
Trusts can be revocable or irrevocable. Revocable trusts can be changed or terminated at any time by the settlor (the person who creates them), while irrevocable trusts cannot be changed once made.
Each type of trust has its own unique benefits and drawbacks, so you will want guidance if you want to make one part of your estate plan. Creating a trust can be a complex procedure, and you may need help to ensure it is properly structured and funded.