Creating an estate plan is filled with major decisions that can impact your life and the way you’re able to care for your loved ones after you pass away. While you may think about leaving things to your beneficiaries through a will, there’s another option to consider.
Trusts are an option that enable you to get things to your loved ones in exactly the way you want. As you establish trusts, you can set terms for when and how it’s distributed. You have to determine what type of trust is best for your circumstances.
What are the categories of trusts you may use?
There are two primary categories of trusts that each have several different types of trusts beneath them. The two categories are irrevocable and revocable. There are very specific things you should know about each of these.
- Irrevocable trusts can’t be altered in any manner once they’re created unless the beneficiaries or court agree to the changes. You hand over control of the assets to the trustee when you fund the trust. Because of this, creditors can’t access the assets in the trust because they belong fully to the trust now.
- Revocable trusts are a bit different because you retain control of the assets and can change the will as you see fit. These trusts don’t provide any protection from creditors.
Understanding exactly how trusts impact your estate plan is important. It’s best for you to work with someone who understands your wishes and the best ways to make those a reality. Getting this done as quickly as possible can give you peace of mind.