The types of trusts, you need to know about the most are revocable and durable trusts. Both of these types of trusts are used for different reasons. In order to determine whether a trust is one that you should use or not, you first need to know about what it is, why you might need it, and what it does. While there is no reason why you should not be aware of all of this information, if you are looking into getting any type of legal help regarding your trust, you will first need to know about the basics. It is also important for each individual to learn about the types of trusts he or she might be able to use. Once you have all of the information that you need, you will then be ready to make decisions that are best for you and your family.
There are some things to think about when thinking about these three different types of trusts. The first thing to consider is whether or not your assets will be protected through one of these trusts. Some of the assets that you want to secure through a revocable trust include your home, retirement accounts, retirement benefits, tax returns, annuities, bank accounts, personal property such as furniture, clothing, and electronics, and other similar assets. These are assets that are less likely to be touched by a bankruptcy, so they cannot be seized by a trustee in a bankruptcy proceeding. However, if the trustee does seize them, they are then placed under a conservatorship which can be an additional stressor for the beneficiary.
Durable trusts differ in that they are considered more flexible than revocable trusts. This means that they can be more easily altered, and they last much longer than revocable trusts. The major reason for this is that these types of trusts cannot be liquidated without the authorization of the trustmaker. Therefore, there is no requirement that the beneficiaries to provide notice of a planned asset liquidation. In addition, they can be settled much faster than revocable trusts, and their probate costs are generally much less.
An irrevocable trust is also another type of trust that needs to be reviewed. Irrevocable trusts are very simple, and the only requirement that is required to take advantage of this type of trust is that the trust maker (the person who established the trust) has power to bind the beneficiaries. For example, the trustmaker can stop any distribution of the assets, and they can also change the beneficiaries. This power of attorney is often used when someone wants to provide the funds for loved ones overseas, or they might just want to change the trustee or the instructions on how the trust should be used. If the beneficiary does not follow the instructions, then irrevocable trusts are very difficult to undo.
Another type of trust that you might need to become familiar with is a revocable devise trust. This type of trust is almost like an irrevocable or revocable trust, except that the trustee (the person who sets up the trust) can change the beneficiaries, instead of just the power to bind. The biggest difference between revocable and irrevocable trusts is that in the latter, the trustmaker has the ability to change the terms of the trust. Revocable trusts are usually used as financial planning tools, and revocable trusts are not as complicated.
The most common type of revocable trust is the simple intestate trust. These types of trusts allow for the same types of distribution options as do irrevocable and revocable trusts, except that the testator, who is the person who has created the trust, instead of the beneficiary, has the ability to change the terms. This allows for changes made after the death of the testator, or during the term of the trust, but doesn’t allow for changes during the term of the trust. In some states, it is also possible for the testator to have the power to override the wishes of the trustmaker with respect to the distribution of the assets.
A revocable alter ego trust is another option that you may come across when you are trying to understand the types of trusts that you need to know about. An alter ego trust differs from a revocable trust in that the testator can change the beneficiaries without having to ask the others to do so. For example, this revocable trust may name two people as co-trustees. One of the people could die, leaving the other person as the sole trustee. The other person would have the power to change the beneficiaries to their ex-spouse or another relative.
One other type of trust is called a limited liability trust. With this type of trust, the testator is considered the only person who has any authority or right to disinherit a beneficiary. This differs from the revocable trust that we just discussed. With a revocable trust, the testator can change the beneficiaries, but if he or she dies, the power of disposing of the estate automatically transfers to another person. With a limited liability trust, however, there is a time limit within which a person can transfer the power. There are many more types of trusts, but hopefully this article has helped you understand the basics.