One of the other questions I get is, what types of trusts are there? Well, there’s a whole different variety of trusts with a bunch of different names, but the main ones that we’ll be talking about are the revocable trust and irrevocable trust, special needs trust, and asset protection trusts.
Now, when most people say that they have a living trust, what they’re talking about is a revocable living trust where they have put their house and other items into the trust to fund it, and those items in the trust are to be used during their lifetime for their benefit and upon their passing, distributed per the terms of the trust.
The irrevocable trust goes one step further because it actually has you as the settlor giving the property away, meaning you cannot at any later time revoke the trust and take that property back out of it. Now, there are special rules on irrevocable trusts and sometimes there’s a way to do that, but for the most part, when you have an irrevocable trust and you fund into it, those items are gone on.
There are also tax planning trusts. Tax planning trusts are when you have an estate large enough that through a scheme of passing your property down over the generations, you can avoid paying taxes potentially. Each case is different and it’s not a guarantee, but there are some general strategies we can use to help you avoid taxes.
There’s also the special needs trust. If you have somebody in your life that you either care for or has a special need where they are on Social Security Disability or some other type of government aid, giving them money may disqualify them from that. So a special needs trust gets put in place to be able to leave some sort of money for them that can be given out under a specific set of circumstances while still protecting their ability to be on either Social Security disability, public aid, or any of the other various government programs out there.
If you have any more questions about living trusts, trusts in general, or just need an estate plan set up, make sure to call me today. Thank you.