Trusts are in incredibly useful estate planning tool that almost anyone can use to their benefit. While some trusts are designed for very specific situations, others can be used for a broad variety of purposes. Because there are so many options available, you will always want to confer with your attorney when choosing the type of trust that is right for you. However, there are several common trust types which many people can use regardless of your situation.
Revocable Living Trust
When you create a trust you determine several key elements. One of these is choosing whether or not you can change the trust or if the trust terms should be permanent. A trust in which you can change is known as a revocable trust because you, the person making the trust, has the right to change the trust terms. These are also known as a living trusts because you create the trust while you are alive instead of doing so through your will. Revocable living trusts offer a wide range of benefits, such as helping to delay probate, allowing for an easy succession of trustees, and protecting both yourself and the beneficiaries in case you someone is incapacitated.
Unlike a living trust, a testamentary trust does not come into existence until you die and the terms of your will become effective. While you can change the terms of a testamentary trust as long as you are alive and have mental capacity, the terms become irrevocable once you die. These trusts are great if you want to preserve assets for your children, provide for a child or adult with disabilities, or you want to give to charities.