What is a trust?
A trust is traditionally used to minimize estate taxes and may offer other benefits as part of a well-crafted estate plan.
There is a wide range of trusts, all designed for specific purposes, such as devaluing your home from your estate, transferring life insurance proceeds out of the probate process, or protecting the inheritance of a spendthrift child. However, all trusts fall into two broad categories: revocable and irrevocable.
The Benefits of Trusts Include:
- Control of Your Assets
- Protection of Your Legacy.
- Privacy & Inheritance Savings
Also known as a living trust, a revocable trust allows for the transfer of assets without the need for probate proceedings, while allowing you to maintain control over them during your (the settlor’s) lifetime. It is flexible and can be dissolved at any time if your circumstances or intentions change. A revocable trust usually becomes irrevocable upon the settlor’s death.
An irrevocable trust typically transfers your assets out of your (grantor’s) estate and potentially out of the reach of estate and estate taxes, but it cannot be modified by the grantor once executed. Therefore, once the trust is established, you will lose control over the assets and will not be able to modify its terms or decide to dissolve it.