Trusts are a common tool used for many estate planning goals. They offer flexibility and convenience, and there are several types of trusts to choose from. However, deciding what kind is best for you and your specific goals can be a challenge. It is important to choose the right one that fits your needs and the types of assets you possess. Before you form a trust for your estate plan, there are several things that you need to understand so that you can be sure you are making the best decisions.
There are several types of trusts
There are a number of trusts for you to choose from. A common trust that you can establish for your plan is the living trust. A living trust can be changed or modified throughout your lifetime and after your death. You, the grantor, decide the terms of a living trust and who will receive the assets within them. They can be revocable or irrevocable. A testamentary trust on the other hand is a trust that is created while a last will and testament is created. The terms of the trust are valid until the assets are finally distributed to beneficiaries.
Understand the reasons for creating a trust
There are a number of reasons to set up a trust. You may want to set up one in order to protect your assets, transfer them to your loved ones over time or after your death, or make sure that your estate does not go through probate. Whatever your reasons, be clear about them and make sure that your decisions are in line with what you want to achieve.
Some trusts cannot be modified
It is important to know that some trusts can be modified, while others are not able to be changed at all once they are made unless permission by a beneficiary is given, as a seasoned trust lawyer like one at Kaplan Law Practice, LLC can tell you. An irrevocable living trust has final terms and cannot be modified by the grantor, who needs permission for any change or condition to be approved. If you want to make a trust that you can change during or after your lifetime, you may want to consider a revocable trust.
Know the different roles
There are several terms to know when you are creating a trust. The grantor is the person who creates the trust, while the trustee is the person who has legal authorization to manage the trust and its contents. The trustee must be responsible and fulfill all of the obligations to manage the trust effectively and according to the grantor’s wishes and conditions. Who you decide to fill these roles is crucial and you should choose carefully.
Consult with a lawyer
If you are not sure where you want to establish a trust as part of your estate plan, you can turn to a lawyer and ask them what your best options are. They can explain the pros and cons of setting up different types of trusts. They can explain to you different scenarios where a trust may be useful. It is a good idea to talk to a lawyer about your estate planning goals so that they can guide you to make the right decisions.
For more information, contact a lawyer who specializes in estate planning near you right away.