While having a will is important in most estate planning situations, you need to decide whether it is enough or if you need a living trust as well. Different factors can determine if you need a trust, which may include your age, the probate process in your state, and the location of your assets.
There are two types of trust available: revocable and irrevocable. There are pros and cons to each option, so it is important to be aware. Warringdosdall.com suggests discussing with your estate planning attorney to choose the right arrangement for your situation.
Revocable Living Trust
As its name suggests, a revocable trust allows you to change and rewrite the terms of the trust as much as you want. This is the widely used method of accomplishing the goals in estate planning. In most cases, a revocable trust is simply a contract made between you (the trust maker) and the trustee, or the one carrying out the trust terms.
This type of trust can also work well in coordination with your will, and can even act as a substitute. This is mainly because it tells how you want your assets to be administered or distributed after your death. It can help ensure a more consistent management of assets in case you become unable to manage your wealth. It can also avoid probate if you own properties in two or more states.
An irrevocable trust, on the other hand, is not retrievable. When you choose this arrangement, you cannot alter it, as it belongs to the trust. These trusts are usually created for the benefit of individuals and charity or organizations.
This can be beneficial for a variety of reasons, like incentives for beneficiaries or generational tax planning. It is helpful to create an irrevocable living trust when you have children with special needs and cannot financially care for themselves. It is also a good option if you want to protect your wealth from a divorced spouse or creditors of the beneficiary.
The choice to have a flexible or restrictive trust depends on your preferences and unique situation. Make sure to work with a reliable estate planning attorney to create a trust that meets your goals.