25 Years Of Experience In Elder Law, Guardianship And Estates

A will is the most common legal document in any estate plan. This legal document outlines beneficiaries who would stand to gain from an estate after the testator passes away. However, many beneficiaries have to wait several months to over a year before they see any assets. At this point, the estate could be taxed and the will contested.

Because of these issues, a will isn’t always favorable. While a will is necessary for an estate plan, testators can include another kind of legal document called a trust. A trust is a legal arrangement that allows a grantor to place assets with a trustee. Once the grantor passes away, the trustee has a fiduciary duty to distribute assets as instructed in the trust.

Many kinds of versatile trusts with special wordage can help fulfill a grantor’s wishes. Here are some options to consider:

1. Revocable trust

A revocable trust is one of the most popular trusts. A grantor does all of the typical things in a revocable trust, including naming beneficiaries and placing assets with a trustee. With this trust, the grantor can alter the contents of the trust at any time during their life. This means that beneficiaries and assets can be included or removed. The grantor also has the right to revoke the trust in its entirety. 

2. Irrevocable trust

An irrevocable trust means the grantor has no right to alter or revoke the trust without, typically, the consent of the beneficiary. While people can make irrevocable trusts while they are alive, some revocable trusts can also become irrevocable after the grantor passes away.

3. Generation-skipping trust

A grantor can make a trust that benefits their grandchildren or great-grandchildren. A generation-skipping trust circumvents one generation to give to the next. In other words, the trust would skip the grantor’s children for the sake of an even younger generation. 

4. Spendthrift trust

Some beneficiaries can’t be trusted to spend their inheritance in a meaningful way. A grantor can make a spendthrift trust with specific conditions that limit the beneficiaries spending power. A beneficiary of a spendthrift trust may only be able to spend allotted amounts of their inheritance over a specific period. 

Making a trust isn’t easy and many state laws can make the process confusing. Grantors may need to reach out for legal help before finalizing their estate plans.