Planning for different situations and circumstances is an important part of the estate planning process. Trusts are a valuable estate planning tool that can serve a variety of purposes and help estate planner’s reach their goals and protect their loved ones.
There are generally two categories of trusts including revocable trusts and irrevocable trusts. Revocable trusts are sometimes referred to as living trusts and can be altered, changed, modified or revoked by the estate planner. Irrevocable trusts, on the other hand, cannot be altered, changed, modified or revoked. A revocable trust can he useful for avoiding the costly and time-consuming probate process. Provided the ownership of trust property is transferred into the trust during the estate planner’s lifetime, it will not be subject to the probate process.
In addition to avoiding significant probate costs and the delays associated with probate process, trusts can also help estate planners avoid certain tax liabilities and protect their assets and privacy. Under the two different broad categories of trusts are specific trust types including special needs trusts, spendthrift trusts, charitable trusts and a variety of other different trust options for estate planners to consider. It is useful for estate planners to be familiar with what their trust options are and how trusts work so they can determine which trust option is best suited for the goals they have for their estate plan.
Trusts are an estate planning option estate planners should be familiar with that can help them provide and care for their loved ones. Knowledge of the different types of trusts can be helpful to estate planners as they are setting up their estate plan and deciding what that means for them.