When you hear the term estate plan, many thoughts likely run through your mind. For some, this is simply thinking that you are too young to even consider an estate plan. And for others, they might automatically think of a will and what assets and property are passed to heirs.
First of all, an adult is never too young to have an estate plan. Additionally, a will is only a piece of the pie that makes up an estate plan. As such, it is important for individuals, young and old, to consider the role of a trust and how it can function with a will.
Adding a trust to your estate plan
At Hanis Irvine Prothero, PLLC, our law firm understands the benefits of adding a trust to an estate plan. Thus, our attorneys use their expertise when guiding clients through the estate planning process, ensuring their assets are secure and protected.
When a trust is created, you are essentially creating a separate entity from yourself. This is comparable to starting a business. You or another named person would serve as the trustee. Thus, when you put assets in the trust, these assets are no longer yours but rather property of the trust. This is why a trust does not go through the probate process.
Types of trusts
There are various types of trust, and each type serves its own purpose. Thus, you might find yourself creating one or more trust types. Because there are countless types of trust, the three most common types will be discussed.
The first is a testamentary trust. This type of trust is created in the will document, only going into effect upon your death. Examples of these include a special needs trust, credit shelter trust and a marital deduction trust.
The second type is a living trust. These are created while you are alive, which allows you to serve as the trustee. Additionally, you can choose how long the trust will survive after you pass. The final type is a revocable trust. This means that after you create the rust, you have the ability to revoke, amend or make changes to it.
Be it now or in the future, having a trust in your estate plan could be beneficial. Thus, it is important to understand the role of a trust and what type is most suitable for your estate plan. This could help you when drafting an estate plan, or, if the situation arises, update your current plan.