Updated: Aug 14, 2020
There are many types of Trusts:
1) Revocable Trust
2) Irrevocable Trust
3) Asset Protection Trust
4) Charitable Trust
5) Constructive Trust
6) Special Needs Trust
7) Spendthrift Trust
8) Tax By-Pass Trust/Credit Shelter Trust
9) Totten Trust (aka Poor Man's Trust)
10) ILIT; Irrevocable Life Insurance Trust
If you are unsure which is the right one for you, you should seek the guidance of an Estate Attorney, it will be money very well-spent. If you know what you want to do, we are the right people for you! We specialize in Trusts and are very happy to help you through the process and you may save thousands of dollars by using our services. According to the AARP, more than 60% of Americans lack a will or estate plan and thus may have little protection of their assets.
-Please download our will and trust worksheets to help you prepare your materials.
-Discussion about the most common types:
-Revocable Trust; this trust allows the trust creator to maintain control of all trust assets. After establishing a revocable trust, the trust creator can amend or revoke the trust at any time.
-Irrevocable Trust; this trust cannot be amended or revoked. Once a person places assets in an irrevocable trust, the assets no longer belong to him or her, they are owned and maintained by the trust.
-Credit shelter trusts, which are also referred to as bypass or family trusts, according to published material, are employed for the purpose of transferring assets while avoiding estate taxes. An individual will draft the documents to create the trust, then put a provision in his or her will that leaves assets (up to the estate tax exemption) to the trust itself. Even if the money in a credit shelter trust grows, it is never subject to estate tax. (Always consult a tax professional before making decisions that may have tax implications).
-Irrevocable Life Insurance Trust (“ILIT”). The function of this trust is to remove the value of your life insurance policy from your taxable estate. The assets in ILITs can be transferred to beneficiaries immediately after a death, in order to pay for any estate costs. One drawback to the ILIT is that, after you have transferred your life insurance policy into it, you cannot borrow against the policy or change your named beneficiary.