A trust can be an important part of your estate. Trusts allow you to avoid probate, minimize taxes, provide organization, maintain control, and provide for yourself and your heirs.
In simple terms, a trust is a book of instructions wherein you tell your people what to do and when.
While there are many types of trusts – the major distinction is whether the trust is revocable or irrevocable.
Revocable trusts are also known as “living trusts” because they benefit you during your lifetime and you can alter, change, modify, or revoke them if your circumstances or goals change.
Control: You stay in control of your revocable trust. You can transfer property into a trust and take it out, serve as the trustee, and be the beneficiary. You have full control. Most of our clients like that.
Decide Who Makes Decisions: You select successor trustees to manage the trust if you become incapacitated and when you die. Most of our clients like that they, not the courts, select who’s in charge when they need help.
Avoid Probate: Your trust assets avoid probate. This makes it difficult for creditors to access assets since they must petition a court for an order to enable the creditor to get to the assets held in the trust. Most of our clients want to protect their beneficiaries’ inheritances.
When irrevocable trusts are used, assets are transferred out of your estate into the name of the trust. You, as the trustmaker, cannot alter, change, modify, or revoke this trust after execution. It’s irrevocable and you usually can’t be in control.
Asset Protection: Irrevocable trust assets have increased asset protection and are kept out of the reach of creditors.
Reduce Taxes: Taxes are often reduced because, in most cases, irrevocable trust assets are no longer part of your estate.
An estate planning attorney can help determine whether a revocable or irrevocable trust is a good fit for you and your family.