When planning out your estate, you may be able to save your heirs time and money by thinking carefully about the kind of trusts you create.
Here are a few trusts that may benefit you:
People typically make revocable trusts. This kind of trust can be adjusted to include or remove assets or revoked during the grantor’s lifetime. Revocable trusts have many benefits, including privacy, minimizing taxable estate and avoiding probate. Furthermore, a revocable trust can be used to control how assets are used after the grantor’s passing.
Irrevocable trusts have many of the same benefits as a revocable trust, but they can’t be altered or revoked once made. Once a grantor passes away, a revocable trust becomes irrevocable. People can create irrevocable trusts, but that can create issues if the grantor wishes to alter it. If a grantor does wish to alter or revoke a trust, they would need the permission of the beneficiary.
A charitable trust can be funded during the life of the donor. After the donor’s passing, the charitable trust will help fund a public charity or private foundation.
In some cases, a grantor may wish to set aside assets so that their pets are cared for after their passing. The trust may help fund their pet’s needs, such as food, shelter and pet bills. The trustee is then responsible for making sure the terms and conditions of the pet trust are met.
Special needs trust
Many people with disabilities or special needs are supported through Medicaid or Medicare and government benefits, which could be terminated if they received an inheritance. A special needs trust could be used to avoid this issue by controlling the frequency of trust distributions. Some people will make trusts that set aside assets to help provide for someone with disabilities or special needs that aren’t supported by government benefits or public or private agencies.
You may need to reach out for legal help to learn about your options when making a trust.