Creating a trust as part of your estate plan can be one of the most beneficial things that you can do to protect your property and you potential heirs. Although each trust has specific legal requirements, all trusts fall into these general categories.
In addition to this, most Trusts are private and do not have to be filed with the court before you pass away, and even after, if there is no court intervention. A federal EIN number to set up the trust is required, in order to set up bank accounts and transfer property into the Trust. Check with your state’s probate laws to see if you can keep your Trust private.
Living or After-Death
Trusts are divided into two main categories — living or after-death. As the name implies, a living trust is a trust that you establish during your lifetime. Normally, You will name yourself as trustee, and sometimes, a spouse can be co-trustee. This way you and/or your wife can be the Trustees and advisers and you can oversee the transactions of the trust.
An after-death trust is set up by direction of your Will, after your passing. This way, money and property can be distributed according to the decedents wishes. In preparing an after-death trust, your estate lawyers will work closely with you to determine the size of your estate, to collect estate information and he or sh will ensure that your wishes are carried out, as to the distribution of your assets, while meeting all legal statutes for the trust itself.
Revocable or Irrevocable Trusts
All living trusts may be created as either revocable or irrevocable. Revocable living trusts are the most common types of trusts created because they can be changed and revoked. However, the money and property distributed into a revocable trust, may not be protected from creditors. For example, if it is a revocable trust, you may change the designated trustee or beneficiaries at any time should your situation changes and you can also change the terms of the distributions. Because you can make changes, creditors may be able to cease property or monies in the trust. Therefore you should make sure that you have set up the trust that meets your needs. Most people like irrevocable trusts, as they can maintain the ability to alter the trust throughout their life’s twists and turns.
An irrevocable trust is a permanent trust, and it cannot be changed. Once it is created, it will remain intact for the life of the trust. While revocable trusts do not offer the same tax shelter advantages as irrevocable trusts, they can protect assets in a different way. Check with your estate planning attorney to see which trust would best meet your needs.
Most people create a trust in order to help their family or their heirs avoid some of the expense of probate after death.
There are also many different types of trusts that can be created such as a gun trust or a pet needs trust or a spendthrift trust, which distributes assets according to your wishes and protects from creditors. They can also be created for specific purposes, such as a special needs trust, one that transfers the ownership of assets and property out of a person’s hands and into an entity’s hands, to eliminating income and property ownership when questions are answered in applying for benefits and other needs. A special needs trust can also care for a child or loved one who will need extensive medical care after your death. And, if you intend to donate a large portion of your estate to charity, you may choose to create a charitable trust to fulfill those wishes. Speak to your qualified estate attorney about the different purposes a trust can be created and used to meet your needs. They will be able to bring you up to spread as to the laws of trusts and set up the terms of your trust. They can also modify the terms of the trust to meet your specifications, set up your EIN numbers and they can also help you transfer your assets into the trust which can be a complicated and tedious process.
For more information or to have one of our legal representatives contact you to set up your trust or Will, visit our website at Goldstein & Scopellite, PC or call us at 214-351-9100. Thank you