People who are setting up an estate plan usually want to minimize the chance of their heirs and beneficiaries battling over their assets. While it’s possible to pass some assets down using a will, there’s also the option of trusts.
Establishing and funding a trust enables you to outline who will benefit from those assets and what terms will govern the trust. There are a few considerations present when you want to use trusts in your estate plan.
Revocable or irrevocable
One of the first things you have to think about is whether you want a revocable or an irrevocable trust. The revocable trust is one that you can change if you decide the terms or beneficiaries you set weren’t correct. An irrevocable trust can’t be changed unless the beneficiaries or court agree with the changes you want to make.
Purpose of the trust
Some trusts have specific purposes. For example, a special needs trust enables you to provide monetary care for individuals who rely on needs-based programs to continue to get those benefits once they’re benefiting from the trust. This is an irrevocable trust that’s managed by a trustee without the beneficiary ever having direct control of the assets.
Ultimately, your estate plan should reflect your wishes. Getting the plan set requires you to consider several points that go beyond the distribution of your assets after you die. Seeking assistance with setting up a comprehensive estate plan is beneficial so you can ensure you have everything set up in a way that reduces the risk of litigation after your death.