While a will is one of the most basic documents included in an estate plan that helps instruct asset distribution, people can benefit from creating a trust. A trust is a legal document that allows a grantor to make an arrangement with a trustee. The trustee is responsible for managing assets and distributing them to beneficiaries.
With a trust, assets may not be taxed and beneficiaries may not have to wait for probate. The grantor has several trust options if they would like to make special considerations. Here are a few trusts to incorporate into an estate plan:
Incentive trust
The grantor can use an incentive trust to control when and why a beneficiary would gain assets. In other words, the grantor may set conditions that the beneficiary must meet before getting any trust funds. The grantor could make it so that, for example, the beneficiary must go to school if they want to gain any assets.
Generation-skipping trust
The grantor could create a trust that would benefit their grandchildren. With a generation-skipping trust, assets may not be taxed so that a younger generation can receive the full extent of a trust.
Pet trust
If a grantor has a pet, they could create a pet trust that helps provide their pet’s basic needs. The funds in a pet trust could be used for their food, shelter, vet bills, etc.
Special needs trust
An inheritance could cause a beneficiary to lose the necessary medical benefits they use to live. A grantor can make a special needs trust to limit how many assets a beneficiary can access so that they can keep their medical coverage.
Picking the right trust for your estate will not have to be difficult if you decide to seek legal help. Please contact our law firm for more information.
