Trusts provide a way for people to pass assets down to their heirs without having to worry about them going through the probate process. There are many different types of trusts, so it’s imperative that you choose the one that suits the circumstances.
One thing that you’ll come across as you’re looking into trusts is that they’re all labeled as revocable or irrevocable, depending on how they’re set up and their purpose. This classification can make a huge difference in what happens with the trusts now and in the future.
What is a revocable trust?
A revocable trust is one that can be changed or dissolved by the creator. This is sometimes referred to as a living trust. The issue with this trust is that it is subject to seizure by creditors. You can put specific conditions on these trusts so that they’re distributed per your exact wishes.
What is an irrevocable trust?
An irrevocable trust is one that can’t be changed or canceled after its creation. These aren’t subjected to creditor claims. When they’re set up in a specific way, they can even help support a beneficiary with special needs who can’t have assets because of a reliance on public assistance. Irrevocable trusts may also offer tax benefits.
People who are creating trusts should understand what classification their trusts fall under. This has a great impact on the protections and specific points that apply to the will. Ensuring that you have everything set up to relays your wishes in a lawful manner can help your loved ones after you pass away.