When considering your estate planning needs, you may want to review various planning options. One of the benefits of creating an estate plan is that you can customize your plan to your specific needs and desires due to the number of available tools. Of course, you may also find yourself feeling overwhelmed by the different paths you could follow in order to create your plan.
Even a single option could have various categories that you could potentially use. For instance, a variety of trusts exist that may help you meet your needs. Understanding the uses of these trusts could help you better decide which could make your plan more comprehensive and allow you to put your remaining assets to use as you wish even after your passing.
Revocable vs irrevocable trusts
In broad terms, revocable and irrevocable trusts exists. These trusts differ in that you can alter the terms of a revocable trust or even completely revoke it, and an irrevocable trust cannot be modified after its creation. Some individuals may prefer the more flexible nature of a revocable trust as it would allow them to make alterations in the event that they later change their minds regarding how they would like to handle the property in this type of trust.
Irrevocable trusts may offer more benefits in terms of asset protection. While revocable trusts can make it more difficult for creditors or other parties to obtain property in the trust, those creditors could still petition the court for those assets to cover debts. With an irrevocable trust, the property is removed from the estate, and you as the trust creator cannot access those assets. Because they are unavailable to you, they also become unavailable to creditors or other similar individuals.
If you have held certain charitable causes in high esteem throughout your life, you may wish to continue making contributions after your death. By creating a charitable trust, you can name a specific charity as beneficiary of the trust, and the funds or other assets would pass to that charity after your demise. Additionally, the creation of this type of trust could benefit you when it comes to avoiding estate or gift taxes.
Special needs trust
A special needs trust is also a specific type of trust that many people could find useful. If you have a disabled loved one to whom you would like to bequeath assets, you may find a special needs trust helpful. Because a sudden influx of money or other assets could damage the individual's eligibility for government benefits, placing the assets into this type of trust could allow you to help your loved one while not putting eligibility at risk.
Find the right trust for you
These are only a few trusts that could be viable options for your estate plan. Therefore, you may wish to gain more information from local legal resources that could help you determine whether these or other forms of trusts could help you meet your planning goals.