There are multiple estate planning tools available that can help ensure your family is protected when you are no longer here. One of the most common instruments used is trusts. Trusts allow individuals to transfer assets to their beneficiaries while avoiding probate and minimizing tax liabilities. There are several different types of trusts available, each with its own unique benefits and limitations. The following is a brief overview. For more detailed information, call our office to speak with a seasoned estate planning attorney.
A revocable trust, also known as a living trust, is a trust that can be amended or revoked during the lifetime of the grantor. This type of trust allows the grantor to maintain control over their assets while alive. Upon the death of the grantor, the assets are then turned over to the beneficiary of the trust, avoiding the probate process for those assets.
An irrevocable trust is a trust that cannot be changed or terminated once it has been established. This type of trust is often used to transfer assets to beneficiaries while minimizing tax liabilities since assets held in an irrevocable trust are typically not subject to estate taxes.
A testamentary trust is created by a person’s will and only takes effect upon their death. This type of trust can be used to provide for minor children, as the assets held in the trust can be managed by a trustee until the children reach a certain age or milestone.
This type of trust is established for charitable purposes. It can provide tax benefits to the grantor, as contributions to the trust are often tax-deductible. Charitable trusts can be either revocable or irrevocable and can be structured to provide either a fixed amount of income to a charity or a percentage of the trust’s assets.
Special Needs Trust
A special needs trust is a type of trust that is established for the benefit of a person with disabilities. This type of trust can be used to provide for the person’s needs without disqualifying them from receiving government benefits, as the assets held in the trust are not counted towards their eligibility for certain benefits.
Asset Protection Trust
An asset protection trust is a type of trust that is established to protect the grantor’s assets from creditors or legal judgments. This type of trust can be either revocable or irrevocable and can provide significant protection for the grantor’s assets.
A generation-skipping trust is a type of trust that is used to transfer assets to beneficiaries who are more than one generation younger than the grantor. This type of trust can be used to minimize estate taxes and provide for future generations.
Contact a Cook County Estate Planning Lawyer
If you would like to learn more information about how trusts can benefit your estate plan, call [[title]] at [[phone]] to schedule a free and confidential consultation with one of our skilled DuPage County trusts attorneys.