Trusts can be an important part of a complete estate plan
Trusts can sometimes be complex and intimidating to understand but they can also be an important part of a complete estate plan. A will and the documents that accompany it, which can include trusts, is the solid foundation of any estate plan. A variety of documents can accompany an estate plan, including wills and health care directives, and depending on the goals for the estate plan, it can also be helpful to consider trusts.
There are a number of different types of trusts to accommodate different estate planning goals. In addition, there are two broad categories of trusts including revocable and irrevocable trusts. Selecting the type of trust depends on the objectives of creator of the trust. Revocable trusts can be revoked by the party that created the trust at any time. There are both benefits and down sides to establishing a trust that it is revocable.
On the other hand, irrevocable trusts cannot be revoked once they have been established. Though a revocable trust does not provide the creator with flexibility to revoke the trust, irrevocable trusts can provide strategic benefits, tax benefits and other benefits as well. It is important to be aware of the different trust categories, specific trust options and how they operate. There can be benefits to selecting one type of trust over the other depending on the goals of the party creating the trust.
Overall, trusts can provide several important benefits including simplifying the probate process, tax benefits and financial benefits for loved ones in particular. It is worth it, when establishing an estate plan, to understand trusts, know how they work, their benefits, how they are drafted and to be aware of the other important requirements associated with trusts.