Revocable Living Trust: Allows you to avoid probate, maintain the privacy of your estate and save your heirs administrative time and expense upon your death. Similar to a Will, this type of trust directs how your assets will be distributed upon your death. As with all Trusts, it must be funded to properly function. You transfer your “probate” assets into the Trust while you are alive. This includes real estate, stocks, bank accounts and personal property. While you are alive, you are the Trustee with full access to all of the assets. As this Trust is “revocable” you may decide at any time to revoke it and remove your assets from it. In the event of your incapacity, a back-up Trustee is named to manage the Trust. Upon your death, your Trustee will see that your wishes are followed, and your assets are distributed accordingly. Asset Protection Trust / Irrevocable Trust: Protects your assets from creditors as well as from long term costs such as nursing home expense. This trust is typically funded with assets that you specifically wish to preserve for your heirs. That may include real estate, gas and oil leases, brokerage accounts and cash. While this Trust cannot be revoked and may only be amended under certain circumstances, you may still access any income that the trust assets produce. Also, while you may not access the principal of the Trust directly, you may access it with the assistance of a trusted heir. This trust is normally used to become eligible for certain benefits such as Medicaid or Veteran’s benefit assistance to pay for long term care. Another reason may be to protect assets from creditors, especially if you or a loved one is in a profession with a high risk of liability. Retirement Plan Trust or IRA Beneficiary Trust: Allows you to transfer your retirement savings to your heirs while protecting the funds from threats in their lives such as bankruptcy and divorce. It also enables your heirs to “stretch” the income taxes due on the funds over a period of time rather than all at once. Rather than the funds flowing directly to your heirs, they flow to a Trust for their benefit. They are managed by a Trustee according to restrictions built to emphasize protection of the funds and maximization of tax savings. This Trust is generally used when you are an excellent saver and have amassed a large sum in your 401K/IRA that you will not extinguish in your retirement. You have a loving spouse and/or child that you wish to provide for, but there is a risk that your hard-earned funds may be squandered. This Trust gives you peace of mind that your assets will survive and provide security for the next generation. Similar to how you wouldn’t extract your own tooth, you shouldn’t try to set up your own trust! A trust is an extremely complex legal document. If it isn’t set up and funded properly there can be negative, unintended consequences. If you want to talk more about trust planning, schedule a free call with us.