The last will and testament is a cornerstone of estate planning for good reason, but there are other ways to help hone the dissemination of your assets after death. Depending on the contents of your estate and your desires, you may find that living trusts are also a valuable estate planning tool.
There are two major types of living trust: irrevocable and revocable. Within these divisions, there are also more specialized trust options. Irrevocable and revocable trusts serve different purposes in estate planning.
This kind of trust you cannot make any changes to after you create it. This is because, with an irrevocable trust, any assets inside of it become the legal property of the trust. They do not belong to you anymore.
One of the major advantages that irrevocable trusts offer is that the government cannot apply estate tax to anything inside of them. Creditors may also not “go after” anything inside of an irrevocable trust: again, the assets in them do not belong to you. However, if you set up an irrevocable trust for the purpose of fraud, the courts may bring charges against you.
This trust is more flexible. You can make as many changes to this kind of trust as you like, prior to your death. Anything that is inside of a revocable trust still remains your personal property.
Revocable trusts allow you to bypass probate. This means that your beneficiaries can obtain their inheritances faster.
There are a number of different estate planning tools that you can take advantage of. Living trusts give you an extra level of control over your assets.