An estate plan serves several purposes; one of the most important is being able to relay the creator’s wishes about who will receive which of their assets. Some people choose to use their will to do this, but there’s another option that might work—trusts.
Trusts are a legal tool that holds assets until it’s time to distribute them according to the terms of the trust. Trusts are either revocable or irrevocable, depending on what control you have over the assets once you create and fund the trust.
What’s the difference between a revocable and an irrevocable trust?
You can change the terms of the trust once you create it if it’s a revocable trust. That’s not the case with an irrevocable trust. In order to change an irrevocable trust, you’d have to obtain the permission of the beneficiaries named in the trust or get permission from the court with jurisdiction over the matter.
Once you create and fund a revocable trust, you maintain control of the assets. You have to hand control over the assets to a trustee if you use an irrevocable trust. Since you don’t have control over the assets in an irrevocable trust, your creditors don’t have the option of seizing the contents of the trust.
Both types of trusts bypass the probate court, which can be advantageous for certain people, and might make it possible for your loved ones to receive their inheritances faster and with less expense. It also makes it possible for the beneficiaries to maintain their privacy since the trust’s terms aren’t entered into the public record.
Trusts aren’t right for everyone, but creating a comprehensive estate plan is critical for all adults. Contact us to learn more about how we can assist you in making your wishes known in a way that’s legally enforceable and easy for your loved ones to follow.