An estate plan gives you many opportunities to plan out what happens to your estate after your passing. While many people only create a will to instruct who should benefit from their estate, some people create trusts to provide their estates with more security.
There are many kinds of trusts Here are four that you may want to contemplate adding to your estate plans:
1. A revocable trust
A revocable trust is a typical legal document that allows a granter to place assets in the hands of a trustee. The trustee is then responsible for distributing assets to beneficiaries at the appropriate time.
The benefit of a revocable trust is that the grantor can add or take assets or revoke the trust at any time. Furthermore, grantors can avoid estate taxes and probate by creating this trust. Once the grantor passes away, the revocable trust becomes irrevocable.
2. A pet trust
Some people leave behind their pets when they pass away. They typically want their pets to be in good hands and will try to ensure this happens by making a pet trust. Assets are put into a pet trust to be used for the pet’s needs and wants and may provide some assets to the pet’s caretaker.
3. Generation-skipping trust
Many parents put away assets for their children. When the grantor’s children have children, the grantor may wish to provide for them as well. One way this can be done is by creating a generation-skipping trust used, typically, for the benefit of grandchildren. Grantors may put aside assets that would be used to further the education of their grandchildren or give them the opportunity to start a business.
4. Charitable trust
Many people wish to give back to their communities and establish a legacy by creating a charitable trust. A charitable trust holds assets to be distributed to public charities or private organizations.
When planning out a trust, it could help you to learn more about your legal options. The right guidance can help you make sure that your estate plan does everything you hope.