There are more than ten types of trusts so it is wrong to decide what type of trust would be best for you, and how to write specific provisions in that trust, without consulting with a good wills and trusts attorney. Here is a brief list of some different types of trusts just to give you an idea.
A bypass trust is used to avoid probate taxes (40%!) by using the deceased spouse’s lifetime exclusion to reduce taxes.
A charitable remainder trust provides a stream of income to you for years and gives the remainder after you die to the charity of your choice.
A special needs trust allows you to carefully provide money to care for needs for yourself or a family member or friend without disqualifying you or your friend from getting government benefits.
A generation skipping trust allows you to distribute your money to your grandchildren without taxation by using your lifetime exemption to offset taxes.
An irrevocable life insurance trust is designed to receive funds from life insurance but spread that money out over payments that can last years and decades. This can be beneficial when you want a young person to receive benefits, but not right away, and you don’t want the young person’s parents to blow the money before the young person gets old and wise enough to manage it himself.
An asset protection trust is a type of trust that is designed to protect your assets from lawsuits but still give you income.
A revocable living trust can be used to avoid probate, provide for someone else to care for your property and assets if you are disabled, and to pass the property on to people you want it to go to after you die.
What type of trust is right for you? Talk to a good estate planning attorney. Peter Wallis, 888-521-4560