Creating a trust helps ensure that the right people receive your assets upon your passing. While you may already know that you want to opt for a trust rather than a will or other arrangement, you may not have considered the many types of trust you have to choose from.
While the details of each kind of trust require further investigation, understanding the basics helps you get started on making a decision.
Types of trust
The following list includes some of the most common types of trust.
- Revocable trust: This option gives the trustor the ability to make changes to the trust until they pass away, at which point assets go to selected beneficiaries.
- Irrevocable trust: Once the trustor creates an irrevocable trust, they no longer have the ability to make further changes.
- Charitable trust: This trust transfers assets to a charitable organization upon the trustor’s passing.
This list contains just a few of the many types of trust. Each type comes with advantages and disadvantages that you should carefully consider.
Choosing the right type of trust
When choosing a type of trust, consider the financial implications of each as well as the unique needs of your family. No matter which option you choose, you should ensure that you remain in compliance with the law and that you follow the correct process to set up the trust.
Having a trust in place gives you peace of mind. While it can take time to understand the many options available to you, you should ultimately feel reassured in knowing what will happen to your assets upon your passing.