Estate planning can be a daunting task, but it’s a necessary one to ensure that your assets are protected and your loved ones are taken care of after you pass away. One option to consider when creating your estate plan is setting up a trust. Trusts can be a valuable tool in achieving your estate planning goals. In this article, we’ll discuss what trusts are, the different types of trusts, and how trusts can help you achieve your estate planning goals.
What is a Trust?
A trust is a legal arrangement in which one person (the trustee) holds and manages assets for the benefit of another person (the beneficiary). The person who creates the trust is known as the grantor. Trusts can be revocable, meaning they can be changed or revoked during the grantor’s lifetime, or irrevocable, meaning they cannot be changed or revoked once they are established.
Different Types of Trusts
There are many types of trusts, each with its own benefits and drawbacks. The most common types of trusts include:
Revocable Living Trusts: These trusts are created during the grantor’s lifetime and can be changed or revoked at any time. They are often used to avoid probate, which is the legal process of settling an estate.
Irrevocable Living Trusts: These trusts cannot be changed or revoked once they are established. They are often used for asset protection, as they can help protect assets from creditors or lawsuits.
Testamentary Trusts: These trusts are created through a will and take effect after the grantor’s death. They are often used to provide for minor children or other beneficiaries who are not able to manage their own finances.
Special Needs Trusts: These trusts are used to provide for beneficiaries with disabilities without disqualifying them from government benefits.
Charitable Trusts: These trusts are established to benefit a charitable organization.
How Trusts Can Help You Achieve Your Estate Planning Goals
Trusts can be an effective tool in achieving your estate planning goals. Some of the benefits of trusts include:
Avoiding Probate: Trusts can help avoid the probate process, which can be time-consuming and costly.
Protecting Assets: Irrevocable trusts can protect assets from creditors or lawsuits.
Providing for Minor Children: Testamentary trusts can provide for minor children or other beneficiaries who are not able to manage their own finances.
Providing for Beneficiaries with Disabilities: Special needs trusts can provide for beneficiaries with disabilities without disqualifying them from government benefits.
Maintaining Control: Trusts allow the grantor to maintain control over how their assets are distributed after they pass away.
Tax Planning: Certain types of trusts can be used for tax planning purposes, such as reducing estate and gift taxes.
Contact Beasley & Ferber for Assistance
Trusts can be a valuable tool in achieving your estate planning goals. They can help you avoid probate, protect your assets, provide for your loved ones, and maintain control over your assets. It’s important to work with an experienced elder law and disability law firm like Beasley & Ferber to determine which type of trust is best for your specific needs. Contact us today to learn more about how we can help you achieve your estate planning goals.
At Beasley & Ferber, we have over 60 years of combined experience in estate planning. For more information about estate planning and to get started with an estate attorney in New Hampshire today, please contact Beasley & Ferber today.