A will is a legal document that instructs how your estate should be settled. It likely names an executor and lists beneficiaries and assets. A will is a fairly straightforward legal document, however, it is not without flaws. For example, a will might be challenged if someone believes they should have benefited from your estate. Or, probate may make it harder for beneficiaries to inherit from the estate in a timely manner.
Alongside a will, you could create a trust. A trust is a legal document that allows a grantor to place assets with a trustee. The trustee agrees to manage the assets until they are instructed to disperse them. This can help avoid issues like estate taxes, probate and disputes.
If you’re considering making a trust, then you may want to learn about your options. There are several trusts with unique legal wordage that allows you to manage how your assets are used even after you pass away. Here’s what you should know:
Revocable trust
A revocable trust is a very common legal document. This allows the grantor to alter the contents of a trust, such as the assets and beneficiaries. The grantor can remove assets and beneficiaries at any time. After the grantor passes away, the trust becomes irrevocable.
Incentive trust
An incentive trust could be made to ensure assets are used in a meaningful way. Beneficiaries may need to meet certain clauses before they can access funds in an incentive trust. For example, assets in an incentive trust could be used after a beneficiary becomes 21 years of age, goes to college or gets married.
Charitable trust
A charitable trust allows the grantor to fund nonprofits, private organizations, research programs or other charitable organizations. Funds in a charitable trust can be dispersed at regular intervals to fund a program for many years.
To learn how you and others can benefit from a trust in your estate plan, you may need to reach out for legal help to learn about your options.
