If you have assets and property you want to protect, one way to do that is by creating a trust. A trust allows you to establish ownership of property outside of yourself as a way to shield the benefits of the trust from certain actions.
When you are deciding whether to create a trust, you will want to remember that there are many different types of trusts that you can consider. The type of trust you ultimately create will depend on a few important factors we will examine below.
Factor #1: How much control do you want? If you are ready to give up control of your assets and leave matters in the hands of your trustee, an irrevocable trust may be what you want. If you still want to control the trust and be able to add and remove property at any time, a revocable trust may be more appropriate.
Factor #2: Who is the beneficiary? There are different trusts available for different types of beneficiaries. For instance, there are charitable trusts that benefit charities and special needs trust that benefit people who receive benefits from the government, including disability. Depending on the type of beneficiary you are assigning, there can be different trusts to consider.
Factor #3: What do you want the trust to do? The various types of trusts come with various characteristics that protect assets differently. Some trusts shield assets from creditors; others minimize certain tax implications. There are trusts that limit how interests can be used and trusts that make it easier to leave money to a spouse.
At the end of the day, finding the right trust can give you peace of mind that your properties and beneficiaries are addressed and protected, but it can be very confusing due to the various types of trusts that exist.
Because of all the trusts available and the limitations and permissions of each type of trust, it can be crucial that you examine your planning goals and legal options with an estate planning attorney.