Trusts are a very common estate planning choice for those who have significant assets. This is true for several reasons, but most notably, it is because holding assets within a trust enables the assets to skip the probate process at the end of the estate planner’s lifetime.
Bypassing the probate process means that assets will not be subject to the hefty fees and lengthy timeframe associated with it, allowing those named in the trust to inherit the assets held within it efficiently. If you want to create a trust, but you are not sure which type is best for you, the following are some options.
A living trust
A living trust, otherwise known as a revocable trust, enables the grantor to have a degree of control over the trust during their lifetime. They can change the trust or revoke it completely over the years. After the grantor passes away, the trust becomes irrevocable.
An irrevocable trust
As the name suggests, an irrevocable trust cannot be modified or terminated. This involves legally removing the rights of ownership of the assets held within the trust. The key advantage of creating an irrevocable trust is that they offer significant tax-shelter benefits.
A testamentary trust is one that comes about through the creation of a will. It is a common choice for those who want to ensure that children from a previous marriage gain a portion of their inheritance.
If you want to make the best choice for your individual circumstances, it is a good idea to explore all avenues when it comes to the different types of trusts available. An attorney can provide valuable insight into which trust will best suit your needs.