It’s often important for people to know how their assets are handled after they pass away. If an estate is mismanaged, then it can seem like all their investments and decisions during their life are wasted. One way that an estate can be protected from being put in the wrong hands is by creating a trust.
A trust is a legal document that allows people to instruct how their assets are managed after they pass away. The grantor gives assets to a trustee. The trustee is then responsible for distributing the assets to beneficiaries at the appropriate time. The most common trust is revocable, which can be altered, added to or removed at any point in the grantor’s life.
If a grantor wants to do more with their trust, they may consider making trusts with unique legal wording. Here are a few trusts to consider making:
1. Charitable trust
Many people wish to fund charities, private organizations or research groups. A charitable trust can be used to disperse assets on predetermined dates at a percentage of an estate or fixed amount to charities.
2. Pet trust
Grantors can put assets in a pet trust for the future care of their pets. Assets in a pet trust can be used for shelter, grooming, food or vet bills related to their pet.
3. Special needs trust
If a grantor has a beneficiary who receives supplemented income or health benefits, then a special needs trust may be needed. This trust limits how much an estate a beneficiary can access without causing them to lose their supplemented income or health benefits.
There are many other kinds of trusts, such as a spendthrift trust or a generation-skipping trust. Learning about each kind of trust by reaching out for legal help could benefit you.
