Trust
An estate planning tool, trusts are described as fiduciary relationships formed between the trust creator or a trustor and a trustee, with the trustor putting their assets under the trust’s name. In this relationship, the trustee is authorized with the responsibility to hold the title to trust creators’ estate for the benefit of the latter’s beneficiaries.
The trust entity itself is a legal document that is created to protect legal assets during the creator’s lifetime and to make sure the estate is passed on to designated beneficiaries as per the creator’s request. Other motivations for trust creation could be Medicaid planning, incapacity planning, planning for retirement, making end-of-life wishes, reduction of estate taxes, and more. Trusts can also be created to provide for and protect the financial well-being of a minor or someone with a mental or physical disability. Some people also create trusts to leave a legacy in the form of charitable giving.
Unlike wills, trust documents are more private. They are created in the presence of an estate planning lawyer and don’t have to undergo the probate process to be executed after the creator’s death. Hence, living trusts protect the privacy of the parties involved.
There are several types of trusts, as mentioned below. Each type has specific requirements and benefits for the beneficiaries and/or the trust creator.
• Revocable trusts
• Irrevocable trusts
• Asset protection trusts
• Special needs trust
• Medicaid trust
• A-B or Bypass trusts
• Pooled trusts
• Totten trusts
• Testamentary trusts
• Charitable trusts
Within this category, you’ll find yourself perusing through articles that cover topics related to trusts, the types of trusts, associated considerations, and more. This will be helpful in your research when determining whether creating a trust is the right plan of action for your estate planning needs.
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