Estate planning is something that you may have put off for a while, but if you’re ready to get started, then it’s time to start learning about the options you have. One interesting option that you may want to look into is setting up trusts for people in your family, charitable gifts and other situations.
Trusts are arrangements that allow a third party to hold assets until their distribution. In revocable trusts, the assets still belong to the owner of the trust. In irrevocable trusts, the assets are taken out of the original owner’s possession and placed in a kind of escrow until the beneficiary meets the terms for distribution.
Of the kinds of trusts available, irrevocable have some benefits that cannot be ignored. They can help reduce the value of your estate, which could help you qualify for Medicaid or avoid estate taxes. They can put your assets into a third-party’s care so that they aren’t at risk of being taken if you’re sued or if creditors come to collect.
This kind of trust isn’t for everyone, but it does have some amazing benefits that you’ll want to talk to your attorney about. Setting up a trust doesn’t take long, but it’s important that you choose the right kind for your situation.
Can you still decide how assets are distributed from a trust?
Yes. You can set up rules for the trust that must be met to receive certain assets. For example, you can set up the trust to payout upon your child’s 21st birthday or once they complete a college program and obtain a job. Your attorney can help you choose the right trust, with the right setup, to make sure your assets are protected and get to your beneficiaries at the right time. Our site has more on irrevocable trusts and what they can do for you.