Discretionary trusts permit the trustee to distribute income and principal among various beneficiaries or to control the disbursements to a single beneficiary, as he or she sees fit. Insurance trusts are tax-saving trusts in which trust assets are used to buy a life insurance policy whose proceeds benefit the settlor's beneficiaries. Medicaid qualifying trusts are trusts that may help you qualify for federal Medicaid benefits by placing certain property in a trust, sometimes limiting your assets for Medicaid purposes. This device is mostly used when family members are concerned with paying the costs of nursing home care. It is dealt with in chapter twelve.
Revocable trusts are simply ones that can be changed, or even terminated, at any time by the donor.
Irrevocable trusts cannot be changed or terminated before the time specified in the trust, but the loss of flexibility may be offset by savings in taxes. They may also be useful for beneficiaries who need protection from creditors. Support trusts direct the trustee to spend only as much income and principal as may be needed for the education and support of the beneficiary. Testamentary trusts are set up in wills. Totten trusts are not really trusts at all.