Determining if a Trust is right for you
Many people believe that a trust is only for the very wealthy. While it is certainly true that the very wealthy often use trusts to protect and preserve their wealth, it is also true that the majority of trust owners do not consider themselves to be rich. Most simply want to protect their hard-earned assets for the benefit of their family and even their community.
Types of Trusts
Although there are numerous ways to fund, structure and manage a trust to suit your unique needs and goals, here are the primary types of trust to consider.
Revocable Living Trust
A Revocable living trust allows you to make changes at any time. You can cancel or revoke the trust, change beneficiaries, add additional assets, or amend other terms of the agreement as you see fit.
An irrevocable trust is an arrangement that cannot be changed or cancelled by the individual who created it. It is irrevocable. Though at first glance this type of trust may not seem appealing, in certain circumstances it is an ideal solution and often offers substantial tax benefits.
This type of trust is created by the terms of your will. Upon your death, your assets pass into trust, which is then managed by a trustee.
A Trust – and there are many different types of charitable Trusts – established to benefit a particular charity or the public. Typically, Charitable Trusts are established as part of an estate plan to lower or avoid imposition of Federal (and some states’) estate and gift taxes.
Special Needs Trust
A Trust that is established for a person who receives government benefits so as not to disqualify the beneficiary from such government benefits. Ordinarily when a person is receiving government benefits, an inheritance or receipt of a gift could reduce or eliminate the person’s eligibility for such benefits. By establishing a Trust which provides for luxuries or other benefits which otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the Trust without defeating his/her eligibility for government benefits.