There are many kinds of trusts that can be used to help create a solid estate plan for you and your family. While an experienced attorney can help you determine the best kind of trust, it's also smart for you to understand them so you can play an active role in creating the right trust for you. In order to get what you want, you need to know what you're looking for.
A few of them include:
Revocable living trusts: A revocable trust is a trust that can be revoked or changed at any time during the lifetime of the individual who set it up, otherwise known as the grantor. Revocable trusts don't provide asset protection the way that irrevocable trusts do, but they have other benefits. Revocable trusts have many advantages. They can offer you privacy, allow you to easily transfer your ownership of assets to another person, and help you avoid probate when you pass away.
Charitable trusts: A charitable trust will allow you to leave money to your favorite causes while avoiding taxes. Once you pass away, your heirs will have reduced estate taxes. There are two main types of charitable trusts: a charitable remainder trust and a charitable lead trust.
Qualified personal residence trusts: A qualified personal residence trust is an irrevocable trust. These trusts can be helpful in transferring your home to loved ones and removing your home from estate tax issues that may arise down the road. A qualified personal residence trust is considered a gift, so it is treated differently from a residence passed to your heirs once you pass away.
Grantor trusts: A grantor trust, also referred to as an intentionally defective grantor trust, is an irrevocable trust. This trust can help you reduce taxes, protect your assets, and properly transfer property to your loved ones.