A trust is a common document in an estate plan. You can use it to create a definitive plan for your assets and protect your wishes for your estate.
It comes with many benefits, and many people use a trust as a means to bypass probate. However, there are many kinds with unique circumstances that can benefit people for varying reasons.
A living trust, also known as a revocable trust, goes into effect while you are still alive, but you retain control and can make changes. Upon your death, the person or entity you named as the successor trustee will obtain control of the trust and be responsible for carrying out your wishes.
Special needs trust
A special needs trust is an option if you have a family member with a disability. These typically protect the family member’s ability to continue receiving government benefits after your death to ensure their inheritance will not interrupt those benefits.
An irrevocable trust differs from a living trust in that you cannot change it once it is in effect. The trust is a sovereign entity, paying its own income tax and filing its own return. Many people choose this option to avoid creditors and additional taxes.
A generation-skipping trust allows you to leave assets directly to your grandchildren, bypassing your children and avoiding estate taxes. There is a generation-skipping tax, but there are exemptions.
As you make your estate plans, you may find it helpful to speak with someone about what options are best for your situation.