Most people believe that developing a trust is an estate planning tool only available to the wealthy. However, it’s important to be aware that several types of trusts are available depending upon the grantor’s needs. While these trusts can range in the level of flexibility they can allow, with the help of a lawyer, it can be possible to choose the right instrument for how assets will be managed and ultimately distributed to heirs. As a trust lawyer trusts from Carpenter & Lewis PLLC will share with those considering a trust, the process can be complicated. Still, by putting in the time and care in planning for the future, it’s possible to experience the many advantages that a trust can offer to the grantor and the family.
Choosing the Right Trust
A trust is when a grantor gives a trustee the power to manage assets placed within a trust, benefiting a third party or beneficiary. The trustee holds a fiduciary duty to the trust and the grantor to ensure that the trust is managed according to the terms originally set out. In some cases, the grantor and the trustee can be the same person, until the time comes for another party to step in and take on this role. Several types of trusts are available, but two of the most widely used types of trusts are revocable or irrevocable. A revocable trust is one that can be changed or even canceled later on while an irrevocable trust is very difficult to make changes to. In addition to the most common, the following are just a few of the many types of trusts that may be appropriate:
- Charitable Trusts
- Special Needs Trusts
- Marital Trusts
- Testamentary Trusts
- Bypass Trusts
When determining the proper trust to choose, it’s essential to speak with a professional about specific needs. Each type of trust offers different advantages, but strategically building a trust that capitalizes upon the potentials can be highly complicated.
Understanding the Key Advantages of a Trust
Incorporating a trust into an estate plan offers advantages for the grantor and the third party who stands to benefit from the trust. While whether to develop a trust largely depends on a person’s financials, they can be a helpful tool as they can allow for detail and flexibility. When a trust makes sense, it can offer advantages that include:
- Asset Protection
- Ensure Estate Details Remain Private
- Potential Tax Savings
- Allows More Control Over How Assets Are Inherited
- Provides Oversight For Younger Children
- Avoid the Number of Assets that Pass Through Probate
Developing a trust offers advantages and provides families and loved ones with peace of mind in knowing that there is a clear plan in place that protects their inheritance for the future. While developing a trust can feel like a significant undertaking, it doesn’t have to be. Working with a legal professional by allowing them to determine whether a trust is the right option can help with selecting the appropriate type of trust to develop and ensuring that the trust specifically addresses the grantor’s needs while meeting their present and future goals.