The best way to prepare for the future and protect your family after you have passed away is by establishing a trust. Instead of subjecting your heirs to the expensive and emotionally intrusive process of appearing in probate court,revocable or irrevocable trusts will make your wishes clear and ensure that the state does not control your assets. It is important however, that you understand the differences between the two basic types of trusts – revocable and irrevocable.
Revocable trusts are those that can be changed by the person who establishes the trust. This allows the trust maker to change the terms of the trust or discontinue it all together. In many cases, these types of trusts – which are designed to allow trust makers to control their assets while they are still alive – are established in order to cover trust makers’ bills in the event that they become disabled. Also, this type of trust gives the person establishing the trust the opportunity to really think about what they want – and to change the terms if needed.
Irrevocable trusts cannot be changed once they are established. These trusts can be used to give assets away – to family members or to a charity – after the person who established the trust dies. The benefits of creating this kind of trust include protecting beneficiaries from creditors, as well as creating tax breaks for them.
Know Your Rights
Estate planning can be a complicated process that should not be placed in just anyone’s hands. Instead of attempting to navigate the issue of trusts on your own, or letting a trust mill create a document for you that does not reflect your individual financial situation, you should consult a qualified attorney who can create the kind of trust that best suits your needs.
This article should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.