A trust, simply put, is an alternative legal arrangement that holds property. Trusts are used for many reasons and come in many varieties. For most people, I recommend a revocable trust that holds all their real estate and other high-dollar value property.
What’s A Revocable Trust?
A revocable trust is advantageous because the settlor (the person who established the trust) can change or terminate the trust at any time. A revocable trust allows assets to be passed without going through probate, meaning your heirs can access the property in a more efficient and less costly manner. A revocable trust with a pour-over will are essential elements of a well-rounded estate plan.
What’s an Irrevocable Trust?
An irrevocable trust is a trust that cannot be revoked by the settlor once established. Irrevocable trusts are something that should be used carefully and established only with the help of a lawyer. For example, if you establish an irrevocable trust to benefit a charity with a $1,000,000 tranche, there’s no way you can take that $1,000,000 out of it for your benefit at a later date.
Other Forms of Trusts?
Other types of trusts can be used to achieve different goals. These forms of trusts include special needs and testamentary trusts. There are also charitable trusts and trusts for pets. Business trusts also exist. When establishing any form of trust, only do so with the qualified legal counsel.