Getting your affairs in order may not seem like a joyful task. However, you may still feel like the time has come to assess your assets and your wishes to determine how you would like your estate handled after your demise. In particular, you may consider how you could protect your assets and still have some control over how your beneficiaries use the assets.
If these are goals you want to achieve through your estate plan, you may want to consider using a trust or even multiple trusts, depending on your wishes and family dynamic. Many different types of trusts exist, which has its pros and cons. You could find trusts that could help you meet specific and personal goals, but it could also be confusing and overwhelming to find the right ones.
What types of trusts exist?
The main two types of trusts are revocable and irrevocable. If you use a revocable trust, you could change the terms of the trust or abolish it completely if you no longer felt it suited your needs. However, the assets would still remain part of your estate while you are living, so if you have creditors, a revocable trust will not prevent creditors from having a claim to the assets in the trust.
If that is a goal you have, an irrevocable trust may better suit your needs because you cannot change this trust once you create it, and you cannot take assets out of this trust. Because you cannot touch these assets, they are no longer part of your estate, and your creditors cannot touch them either.
Subsets of trusts
In addition to these two main types of trusts, other subsets of trusts exist as well, including the following examples:
- Charitable trusts that allow you to leave funds to charitable organizations of your choosing
- Spendthrift trusts that allow you to create terms that would prevent a financially irresponsible beneficiary from squandering the assets
- Special needs trusts that could allow you to provide assets to a loved one with special needs without putting his or her eligibility for government benefits at risk
Of course, many other trusts exist besides the few examples given here. If you feel that trusts could help you better plan out your affairs and address your asset distribution wishes, you may want to contact an experienced Ohio attorney who will delve deeper into important information about the types of trusts and which could be right for you.