The thought of estate planning may seem overwhelming, but it doesn’t have to be that way. A simple will can easily be paired with a trust. This will help to ensure that your beneficiaries are the recipients of your assets when you are not here to speak for yourself.
A variety of assets may be held in trusts. These include property, money, and stocks. A person who has amassed great wealth during his lifetime may choose to set up several trusts for his beneficiaries based on their specific needs.
Different types of trusts
There are a variety of trusts that can be set up when you do your estate planning. These include (but are not limited to):
- Living trusts are created by the grantor (you) during your lifetime. This type of trust may be reviewed during your lifetime and updated as often as you wish.
- Testamentary trusts are created from your will after you pass away if you didn’t already have one in place. This is also known as a trust under will.
- Special needs trusts can be set up for your disabled beneficiary. This allows them to have the benefit of uninterrupted care without fear of losing their public assistance benefits.
- Irrevocable life insurance trusts are supported by a life insurance policy. The trust acts as both the beneficiary and the policy owner. That being said, the grantor’s heirs are still able to be the beneficiaries of the trust itself. In order to validate this type of trust, the grantor must live a minimum of three years from the time that the policy is transferred. Otherwise, the proceeds from the policy remain part of the grantor’s estate.
An experienced legal guide can assist you in setting up the right type of trust for your beneficiaries.