A trust is a legal arrangement that allows your assets to be held and managed by a third party. This third party is known as a Trustee. The Trustee is the person or group of people that are responsible for ensuring that your estate is handled in the manner specified in the trust. There are several purposes for a trust, but one of the more common reasons people choose to use a trust is to make sure their assets are distributed how they wish and avoiding the need for Probate. There are many different types of trusts, each serving a specific purpose; here are some of the most common:
- Living Trust – A living trust is a legal arrangement established by a grantor during their lifetime to protect their assets and direct their distribution after the grantor’s death.
- Revocable Trust – A revocable trust allows the creator / trustor to make changes to the document or terminate the trust altogether.
- Irrevocable Trust – An irrevocable trust is a trust where the trustor nor anyone else is allowed to change the document. Often a revocable trust will become irrevocable when an even occurs, such as the passing of the trustor.
- Special Needs Trust – A Special Needs Trust allows a person with special needs to be awarded their inheritance without impacting their Social Security benefits.
- Asset Protection Trust – An Asset Protection Trust is a trust that is designed to protect a trustor’s assets from creditor claims.
- Charitable Trust – A Charitable Trusts is a trust designed to carry out the charitable interests of a trustor.
- Trust Fund – A Trust Fund is an estate planning tool that holds property or assets for a person or organization. Trust funds can hold a variety of assets including currency, real property, stocks, or a business interest.
A trust is just one way of handling estate planning. In some cases a will or last will and testament may be a better option for you. If you are trying to decide how to provide for the distribution of your assets or care of your children after you die or need legal assistance, you should contact a lawyer for guidance.