A trust is a legal document that can help avoid estate taxes, probate and disputes and ensure assets are distributed to beneficiaries. The grantor can place assets in a revocable trust, which allows the grantor to alter the contents of a trust at any time. When the time comes, the revocable trust can become irrevocable and the trustee can distribute assets to beneficiaries according to the grantor’s desires.
There are numerous different types of trusts. A grantor can make a trust with special legal wordage to help handle assets exactly how they wish. Here’s what you should know:
Generation-skipping trust
The grantor can place assets in a generation-skipping trust, which would circumvent one generation for the benefit of another one that’s younger. The assets can avoid taxes by doing this. Many people make generation-skipping trusts to help fund grandchildren through school.
Charitable trust
A charitable trust can be made so that a grantor can help fund charities, private organizations or research programs. The assets in this kind of trust can be dispersed annually at a regular sum or at a percentage of the estate’s capital.
Special needs trust
A beneficiary may benefit from special needs programs, such as supplemental income or medical insurance. If the beneficiary gains too much from a trust, they could lose their benefits. A special needs trust could be made to regulate how many assets the beneficiary gets so they can retain their special needs benefits.
Spendthrift trust
Some beneficiaries are too young or impulsive to handle a large estate. The grantor can make a spendthrift trust that limits how many assets the beneficiary gets. This can make it so the beneficiary can still live comfortably without spending all of their assets irresponsibly.
It can help grantors to reach out for legal support as they explore their trust options.
