The basics of trusts

On Behalf of | Feb 28, 2019 | Estate Planning, Firm News |

People in Florida who want to understand their options when it comes to estate planning should know that a will is far from the only type of tool that may benefit them. For many people, the use of a trust can be a beneficial asset in protecting their estate and controlling what happens to their assets. However, it is important to understand the various types of trusts available in order to select the best one for a situation.

As explained by The Street, a trust may be used to provide direction about the distribution of assets after a person dies. This is often referred to as a testamentary trust. A trust may also be used to allow a person to better manage their assets while they are still alive. This is often referred to as a living trust. Some people may wish to establish a trust to provide for another person during their lifetime. An example of this would be a trust set up to fund the care of a special needs child.

According to The Motley Fool, a trust may be created in a way that allows the person who established the trust to make changes at any time. These trusts are known as revocable trusts. There are also irrevocable trusts that do not provide this level of flexibility but that may offer better protection of assets from creditors.

For some, tax advantages may be realized and these advantages may be a primary reason for establishing a trust. For other people, a trust can help them direct the flow of their assets with more clarity.