Is your estate protected from debt collectors, taxes and legal disputes? One of the best ways to protect your estate and help ensure that your assets are distributed to your family and loved ones the way you intend is by incorporating a trust into your plan.
A trust is a legal arrangement that can be used to remove assets from your estate and keep them separate. A trustee, as appointed by you, then has the responsibility to manage trust funds and distribute assets to beneficiaries. There are several types of trusts you may want to consider adding to your estate plan, including the following:
1. Revocable trust
A revocable trust is one of the most common types of trusts. This trust allows you to alter the contents of the trust at any time. When you pass away, the trust becomes irrevocable and typically cannot be altered.
2. Spendthrift trust
If you have a beneficiary who mismanages their money, you may need to consider drafting a spendthrift trust. A spendthrift trust allows you to limit access to trust funds so that beneficiaries do not waste their inheritance.
3. Generation-skipping trust
Do you have or expect grandchildren? You can set up a generation-skipping trust to save and distribute an inheritance for future generations.
4. Special needs trust
Leaving an inheritance behind for a family member who receives special needs care could impact their benefits. However, a special needs trust can set a limit on trust funds so that a beneficiary can continue receiving special needs care.
5. Pet trust
A pet trust allows you to put aside trust funds for the care of a pet. The funds can be distributed to your pet’s caretaker and be used to feed, shelter and care for your pet.
If you want to explore your trust options, you may need to reach out for professional legal help.