Different Types of Trusts Available to You
While you’re conducting estate planning for the future, you may want to focus on creating a trust, which is a type of legal entity that allows a second party to hold assets that will eventually be provided to a third party or beneficiary. Given that there are numerous types of trusts that you can choose from, you’ll want to understand the differences between these options before selecting one. You can also obtain the services of a trust administration lawyer Las Vegas if you want to be provided with advice while creating a trust.
What Is a Trust?
A trust is a type of financial agreement that’s made between you and two other parties. The second party will hold your assets for the third party who will eventually receive the assets. These assets can include your estate or any kind of property. The trustee who is supposed to manage the trust will be titled within the agreement that’s made. The third party can be one or more beneficiaries of the trust.
Main Types of Trust
There are five primary types of trust that include living, revocable, testamentary, irrevocable, and funded/unfunded trusts. While these are the main types for you to select from, there are a variety of others that may apply to you. A living trust is one that’s made during the grantor’s lifetime wherein the property or assets contained within are meant to be used during their lifetime before being provided to the beneficiary upon the grantor’s death. A testamentary trust details who should receive assets upon the grantor’s death, while a revocable trust is one that can be changed or closed at any time. On the other hand, an irrevocable trust cannot be changed, and the assets are unable to be moved back to the grantor. Funded and unfunded trusts are trusts that can have assets placed into them during or after the death of the grantor.
Benefits of a Trust
The main benefit of creating a trust is that it can help you reduce the estate taxes that your beneficiaries will need to pay upon your death. Other benefits include the ability to avoid probate and the requisite court fees, to protect your assets from creditors, and to allocate your assets into the right hands.