Are you overwhelmed by the estate planning process? It is understandable if you are. There are a lot of options out there and making sense of them all can be difficult and time-consuming. But if you want to protect your assets and your loved ones, you need to know how to competently navigate the process. One way to do so is to gain a better understanding of some of the trusts that you may be able to use to meet your goals. We hope that this blog post will give you a starting point.
The trust options available to you
There are a lot of trusts out there and some of them may be able to provide you with the protection that you’re looking for, or that you never knew that you needed. Let’s look at some of those options:
- Spendthrift trust: This trust allows you to pass your wealth down to someone without having to worry that they’ll squander it away. Here, the trustee has discretion on when to release assets, and the beneficiary or his or her creditors can’t reach the funds until they’re distributed.
- Incentive trust: This allows you to motivate your loved ones to act in a certain way that you think will be beneficial to them.
- Charitable trust: This type of trust is set up to ensure that you’re able to support a cause that you believe in for a long time to come.
- Remainder trust: This trust allows a named beneficiary to receive periodic distribution of assets, with whatever is left over at the end of that initial period being distributed to a second beneficiary. This may prove helpful in a blended family where you want to ensure that your spouse is supported but also that your children from a previous marriage are taken care of appropriately. You can also use this type of trust to support both a loved one and a charity.
- Special needs trust: If have a loved one who may be receiving public benefits for their continued medical support, then you may need a special needs trust. This type of trust allows you to set money aside to care for your loved one without affecting their ability to receive assistance from Medicaid.
- Totten trust: This type of trust allows a named beneficiary to inherit assets immediately upon death. You’re free to add or remove assets from this trust during your lifetime, which gives you a lot of flexibility.
- Generation-skipping trust: With this vehicle, your assets skip over your children and are directly inherited by your grandchildren.
These are just some of the trust options that may be available to you. Remember, you can tailor your estate plan to suit your needs, so you can use many of these trusts in conjunction with each other to ensure that you have your bases covered.
Do you need additional guidance?
We know there’s a lot to consider as you contemplate your estate plan and what you want to contribute for your loved ones’ futures. It can all become overwhelming to think about. Don’t let that deter you from taking the actions needed to create a comprehensive estate plan. Instead, let it motivate you to seek out the guidance that you need. Hopefully after thoroughly vetting your options, you’ll be able to take comfort knowing that your assets will be distributed exactly how you want when the time comes.