By: Attorney Shira Truitt
A trust is a legal arrangement in which a person, known as the grantor or settlor, transfers ownership of their assets to a trustee, who holds and manages the assets for the benefit of one or more beneficiaries. There are several types of trusts, each with its own specific provisions and requirements.
One common type of trust is a revocable living trust, also known as a revocable inter vivos trust. This type of trust is created during the grantor's lifetime and can be amended or revoked by the grantor at any time. A revocable living trust allows the grantor to specify how their assets should be managed and distributed while they are still alive, and it can also be used to avoid the probate process upon the grantor's death.
Another common type of trust is an irrevocable trust, which cannot be amended or revoked by the grantor once it is created. An irrevocable trust is often used for estate planning purposes, such as reducing estate taxes or protecting assets from creditors.
A charitable trust is a type of trust that is created for the purpose of benefiting a charitable organization or charitable cause. A charitable trust can be either revocable or irrevocable, depending on the specific provisions of the trust.
A special needs trust, also known as a supplemental needs trust, is a type of trust that is used to provide for the financial needs of an individual with a disability, while still allowing the individual to qualify for government benefits such as Medicaid.
Trusts can be used in estate planning to manage and distribute assets upon the death of an individual, reduce estate taxes, protect assets from creditors, benefit charitable organizations or causes, and provide for the financial needs of a beneficiary with a disability. It is important to carefully consider your specific goals and needs when deciding whether a trust is the right option for your estate planning needs.
A trust is an effective part of an estate plan. Knowing the difference and understanding your needs and goals help determine what trust, if any, you may employ as part of your overall plan. Consulting with a competent estate planning attorney can assist you in reaching your goal.
If you need legal advice or a lawyer in Illinois or Missouri, please contact The Truitt Law Firm, LLC for assistance. For more information on The Truitt Law Firm, LLC or to schedule an appointment, please go to www.thetruittlawfirm.com.
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