Different Trusts to Fit Your Needs
Everyone has their own unique personality, distinct perspective, and, therefore, different needs in their lives. Phelps LaClair understands that one size does not fit everyone perfectly and that is why we tailor our estate planning services to each person that comes in. We serve the east valley (Gilbert, Chandler, Mesa, Phoenix, Scottsdale) providing excellent guidance with power of attorney, beneficiaries, wills and trusts. We recognize that each person has their own unique aspects of themselves and we personalize services that best fit you and your family.
What is a Trust?
A trust is a part of a well thought out estate plan that is setup to protect your assets. A trust can decrease estate taxes and can offer other benefits for you and your loved ones. A beneficiary can be setup through a trust, which allows a third party, or trustee, to hold assets on behalf of the trustor. The trust is a safety net ensuring protection for your assets with a responsible beneficiary so that your wishes will be followed upon an event where you, the trustor, are incapacitated.
Types of Trusts
The two main types of trusts include a Living Trust and a Testamentary Trust. The Living Trust provides allocation of assets and is established while the trustor is living. The Testamentary Trust is set up in a will where the allocation of assets and wishes of the trustor come into effect after the trustor is deceased. While these two are the main types of trusts, there are other more specific trusts that can be beneficial for you and your family. Other specific trusts that are available include:
- Gun Trusts: Allows firearms to be legally and responsibly passed on through family members.
- Charitable Trusts: Can be a part of a financial planning tool for a person, where it benefits a particular charity or the public.
- Special Needs Trust: Set up for a person who receives government benefits so as to not disqualify them from continuing to receive the benefits.
- Asset Protection Trust: Created to protect a person’s assets from creditor claims.
- Constructive Trusts: This is an implied trust that is determined by the court where, if a person passes away, it can be determined they had intention for their assets to go to a particular purpose or person.
- Spendthrift Trust: Established for the beneficiary, they are not allowed to sell or pledge away interest in the trust.
- Revocable Living Trust: Created during the lifetime of the trustor and can be changed or altered as needed during their lifespan.
- Irrevocable Living Trust: Created during the lifetime of the trustor but cannot be changed, altered, or revoked.
- Totten Trust: During the trustor’s lifetime, they continually put money into an account for the trustee and the trust is unable to be pulled from until the trustor has passed away or until an unequivocal act occurs during the trustor’s lifetime.
While there are many different aspects of each trust, it is best to find what fits for you. It is good to ask yourself what you are wanting for the future of your loved ones, how you want your assets to benefit them, and what is the best way.
Phelps LaClair is here to help guide you through the specifics of the different types of trusts and to help determine what would be a best fit for you and your family. Contact us today to move towards a well crafted estate plan.
Images used under creative commons license – commercial use (8/8/2017) farhan hossain (Flickr)