People who are creating an estate plan should think about the best way they can pass their assets down to the heirs they want to have them. For some, the answer to this might be setting up a trust. This often takes away the need to go through the probate process entirely.
There are many types of trusts that you have to consider. All of these fall under two general categories – revocable or irrevocable. These two categories have very specific points for you to consider.
How do revocable and irrevocable trusts differ?
Revocable trusts are those that can be changed or canceled by the person who creates them. These aren’t protected from creditors because the person who creates the trust maintains control over it. If you owe money when you pass away, creditors may make a claim that dips into the trust.
Irrevocable trusts are firmly in place once they’re created. Because the creator doesn’t have control over the trust any longer, the contents of the trust are protected from creditors once the trust is funded. Some of these trusts, such as special needs trusts, have special purposes that can greatly benefit the recipients.
Creating your estate plan means that you need to use the tools that are available. While you might not think that you need to establish trusts, you may find that they are beneficial. Finding assistance from someone who’s familiar with cases like yours can help you to ensure things are set up in the proper manner. This gives you peace of mind since you know your affairs are in order.