A will is the starting point of any estate plan, but numerous other documents can be utilized. One important estate planning tool is trusts. Trusts come in different forms and they can be drafted to meet your needs.
Here are 3 of the most common types of trusts in estate planning.
Revocable living trusts
Revocable trusts allow you to maintain control over your assets while ensuring a smooth transfer of your assets to beneficiaries upon your passing. These trusts can be modified or dissolved at any point while you are alive. One of the main benefits of this type of trust is that it avoids probate, which means a more efficient distribution process.
Irrevocable trusts
Irrevocable trusts can also be helpful. As the name suggests, they cannot be altered once established. Irrevocable trusts are very useful in protecting assets from creditors and minimizing estate taxes.
Charitable trusts
If charitable giving is important to you, you can continue it after your passing. One effective way to do this is to use charitable trusts. Charitable trusts come in two main formats: charitable remainder trusts and charitable lead trusts.
Charitable remainder trusts provide beneficiaries with an income for a designated period. Once that period is over, the remaining assets go to your chosen charitable cause. Charitable lead trusts operate differently. A charitable lead trust first distributes assets to the charity, with the remaining assets being distributed among beneficiaries.
Trusts are just one important aspect of estate planning. To explore your options in more detail and draft a plan that works for you, it may be beneficial to seek legal guidance.