Trusts are one of the estate planning tools you have available when you need to pass assets down to your loved ones upon your death. There are many benefits to establishing trusts instead of just outlining everything in your will. One of these is that the trust provides some measure of privacy since it doesn’t have to go through the probate process.
Once you decide that you’re going to set up trusts, you have to determine what type. In order to do this, you must think about what the purpose of the trust will be. For example, a special needs trust can pass assets to a person who is on needs-based assistance programs because the trust’s assets remain in the trust and aren’t directly passed down to them. Additionally, the wording in the trust will exclude it from being used as a primary means of support for the person.
When you are vetting out your options, you need to determine whether you need an irrevocable or revocable trust. Irrevocable trusts can’t be changed once it’s set, but it provides specific protections from creditors. Revocable trusts can be changed but they don’t provide the creditor protection. Some people choose to use these because of the flexibility and because they’re at a low risk of being sued.
Ultimately, you have to do what you feel is right for your loved ones. The goal of any trust is to support them when you pass away. You should consider it as a vital part of your comprehensive estate plan so that your beneficiaries are taken care of when you pass away.