When it comes to estate planning, trusts are a popular way to protect your assets and ensure they are distributed according to your wishes. But did you know that there are different types of trusts? Here, we’ll break down the most common types of trusts so you can better understand which one might be right for you and your family.
Revocable Trusts
A revocable trust is a type of trust that can be modified or dissolved at any time by the person who created it (known as the grantor). This flexibility makes revocable trusts a popular choice for people who want to retain control over their assets during their lifetime.
Irrevocable Trusts
An irrevocable trust is a type of trust that cannot be modified or dissolved after it has been created. This means that once you transfer assets into an irrevocable trust, you will no longer have direct control over them. However, irrevocable trusts can still be a helpful tool in estate planning, as they can provide certain tax benefits and asset protection.
Living Trusts
A living trust is a type of revocable trust that is created during the grantor’s lifetime. Assets that are transferred into a living trust avoid probate upon the grantor’s death. Living trusts can be beneficial if you want to ensure that your assets are distributed quickly and efficiently after your death.
Testamentary Trusts
A testamentary trust is a type of trust that is created upon the grantor’s death through their will. Testamentary trusts are revocable during the grantor’s lifetime but become irrevocable upon their death. One benefit of a testamentary trust is that it can help minimize estate taxes.
Special Needs Trusts
A special needs trust is a type of irrevocable trust that is used to provide for the care of a beneficiary with special needs. Special needs trusts can be used to protect the beneficiary’s eligibility for government benefits while still providing for their financial needs.
Charitable Trusts
A charitable trust is a type of irrevocable trust that is used to provide financial support to a charitable organization. Charitable trusts can offer certain tax benefits to the grantor, as well as the satisfaction of knowing that your assets will be used to support a cause that you care about.
Trusts for pets
Yes, there is such a thing as a trust for your beloved pet! A pet trust is a type of revocable trust that is used to provide for the care of your pet in the event of your death. Pet trusts can be used to ensure that your pet will be well-cared for, even if you are no longer around to do so yourself.
If you’re not sure which type of trust is right for you, it’s a good idea to speak with an estate planning attorney who can help you determine which option would be best for your needs.
Please contact us today at (210) 340-8877 for a free consultation. We would be happy to review your case and answer any questions you may have.