Estate planning can be beneficial to all adults. The process centers around putting your final wishes into legally binding documents. This way, your assets can be distributed according to your wishes upon your death.
One term that you might have heard is trust. What is a trust and why might it be useful to you? There are several types of trusts that serve different functions. This is why it’s so important to have as much information as possible before setting up your estate plan.
Living trusts
As the name suggests, living trusts are intended to benefit the creator during their lifetime. For example, a parent may leave their house in a trust for the children but have the legal right to live there until their death.
Charitable trusts
Giving to charity may have been an important part of your life, and it’s something that you want to continue even after your death. A charitable remainder trust allows you to do exactly this. You may choose to leave property to the charity in the trust or other assets of value.
Revocable and irrevocable
Broadly speaking, trusts are either revocable or irrevocable. Revocable trusts are able to be changed throughout the creator’s lifetime. Contrastingly, irrevocable trusts cannot be changed. The benefit of setting up an irrevocable trust is that it is usually low tax or could even incur no tax costs at all.
As you can see, estate planning can be complex. That’s why it’s so important to have legal guidance behind you. This will help ensure that you can relax during your lifetime with the knowledge that your final wishes will be acknowledged.