As you start estate planning, you may not realize that there are several types of wills and trusts. For example, you can create a testamentary trust, revocable trust, or an irrevocable trust.
If you are looking for a flexible estate planning option, a revocable trust may be a good way to go. With one of these trusts, you can change the terms at any time. For example, you can sell property, remove assets, or change beneficiaries. Most of the time, the creators of these trusts name themselves as the trustee, so they can continue to use their property.
After death, a revocable trust will then become an irrevocable trust, which cannot easily be changed or terminated. Once this happens, the successor trustee follows the instructions in the trust document to distribute assets and manage assets.
Comparatively, with a revocable trust, you need to have a successor trustee manage the assets in the trust. With these trusts, having a successor trustee protects the assets in the trust in the event of disability.
The final type of trust, a testamentary trust, is created in connection with the instructions outlined in a last will and testament. For example, the will may include instructions for how assets held in a trust will be distributed and managed for a child by the trustee. The funds held in the trust may be used for education, health, maintenance, and financial support.
Although wills and trusts may seem overwhelming, they can be effective estate planning tools, depending on your needs. Contact our office today to learn more about wills and trusts.