One of the primary purposes of an estate plan is to provide instructions for who gets what assets. Some people do this through their will, but another option to consider is trusts. Many people opt to establish trusts to pass the assets along.
Trusts bypass the probate process, which gets the assets to the intended beneficiaries in a more timely manner than what’s possible if they had the probate process. They can also benefit from more privacy when assets are transferred using a trust.
Categories of trusts
There are many different types of trusts, but they’re all categorized as either a revocable or irrevocable trust. A revocable trust is one that you can change when you feel the need, so you’re free to remove or add beneficiaries. You can also alter the terms or cancel the trust.
An irrevocable trust is one that you can’t change or cancel once it’s created. The exception to this is if you can obtain consent from the named beneficiaries or from the court that has jurisdiction over the trust. Once the trust is funded, the assets are under the control of the trustee, which enables those assets to be protected from claims by your creditors.
Different types of trusts have specific protections, terms and purposes. Working with someone familiar with estate planning can help you to ensure that you’re relaying all your wishes in a legally enforceable manner. It’s best to get your estate plan set as soon as possible so you have peace of mind in knowing your loved ones are taken care of when you die.