Creating an estate plan lets you relay your wishes to your loved ones. There are several components to consider. One of these is the trust.
There are a few essential points to know about trusts to ensure you’re using the specific type that passes down assets to your beneficiaries in your intended manner.
Some can be changed
There are two categories of trusts – revocable and irrevocable. The creator can change a revocable trust, but an irrevocable trust can’t be changed without the court’s or beneficiaries’ approval. You can control the assets in a revocable trust, but you give up that control to the trustee when you establish an irrevocable trust.
Terms can be set
There are various types of trusts that you can set up. Some have a specific purpose. One of these is the special needs trust, which enables you to provide financial support for someone who relies on needs-based programs without impacting their qualification for those. Other specific types of trusts are also available, so relay your wishes to whoever is helping you get your estate plan established.
Irrevocable trusts protect from creditor claims against you, but revocable trusts don’t offer the same thing. There are also tax protections available for some trusts, so that’s a consideration you should learn about as you try to determine if a specific trust will work for your situation.
Trusts are only one component of a comprehensive estate plan. Ensuring you have everything set up so your loved ones are cared for after your death may give you greater peace of mind. Seeking legal guidance to craft a personalized approach is a great way to get started.