When most people think about estate planning, their thoughts immediately jump to the creation of a will. Trusts, if they are thought about at all, are usually considered a tool for the wealthy. You might believe that there’s no way you could benefit from the creation of a trust.
The truth is trusts can be useful for people in all types of financial situations. Creating a living trust can help you safeguard your assets. In addition, any assets that pass through the trust do not have to go through probate. This can help save significant time and expense and help ease the estate administration process.
Which type of trust is best for your situation?
There are numerous trust options available to help fit nearly any type of situation. However, there are two main types of living trusts that most people will turn to.
A revocable trust enables you to control your assets while you’re still alive. As the name implies, you’re free to make changes to this type of trust as you see fit. Any assets you place in the trust are still part of your personal property. After you’re gone, any assets that remain in the trust will be distributed according to your wishes. These assets are not subject to probate.
An irrevocable trust is more restrictive than a revocable trust. Once you create this type of trust, you cannot make changes to the trust. Any assets you place in the trust become the property of the trust. In most cases, creditors cannot touch assets put into an irrevocable trust. An irrevocable trust is usually the best choice for people who have significant assets.
Living trusts are only one part of a comprehensive estate plan
Your estate plan should be as unique as your life. You can tailor trusts and other estate planning tools to best suit your needs and the needs of your family. You should take the time to discuss your estate plan with a skilled legal professional.
