Adults should get an estate plan together so their loved ones know who will receive what assets and how other matters should be handled. This plan can include a variety of components, some of which govern what happens to specific assets.
You can set the plan for the assets in your will, but there’s another option, trusts, that’s more structured. Trusts give you the ability to provide terms for how the assets are distributed, and they come with other benefits that are determined by the type of trust that you set up.
What are revocable and irrevocable trusts?
Revocable and irrevocable trusts are two distinct categories of trusts that you’ll come across when you’re reviewing different types that may benefit your estate plan. A revocable trust is one that you can change for any reason and at any time. You retain control of the assets in a revocable trust, so there are limited benefits to this type of trust.
An irrevocable trust can’t be changed easily unless you can get permission from the beneficiaries or the court. Control over the assets in the trust is transferred to the named trustee, so you don’t have control. This paves the way for significant benefits, including protection from your creditors.
Adding trusts to your estate plan can help ensure your wishes are followed. Trusts don’t have to go through the probate process, so your beneficiaries will have privacy since the terms aren’t part of the public court record. Getting the trust set up in the way that best benefits your loved ones is critical, so it’s best to work with someone familiar with these matters.