Estate planning trusts can be an excellent estate planning and asset protection tool. But, what kind of estate planning trusts should you use?
Learn much more by getting Secrets of Effective Estate Planning, Click Here
Hi, I’m Gary DeWitt, Estate Planning Attorney in Northwest Arkansas.
Estate Planning Trusts
Estate planning trusts come in four major divisions. These 4 divisions break down into two divisions.
The first division is revocable or irrevocable. A revocable trust can be changed easily during your lifetime or even abolished. You can take assets out and put assets in at will. An irrevocable trust for estate planning means the trust cannot be revoked or easily changed. An irrevocable estate planning trust must usually run its course and terminate on its own.
The other division is living or testamentary. A living trust is one created during a person’s lifetime. A testamentary trust is created after passing, usually by a Last Will and Testament.
Estate Planning Trusts – 4 Major Divisions
Combining these, you get the 4 major divisions:
- Revocable Living Trust
- Irrevocable Living Trust
- Revocable Testamentary Trust
- Irrevocable Testamentary Trust
Of them, only 1, 2, and 4 are typical.
Most Popular Estate Planning Trusts
As far as estate planning trusts are concerned, the most popular is the Revocable Living Trust. It is flexible, helps protect the assets in the Trust, and the assets in the Trust avoid probate.
For advanced planning, and Medicaid planning, Irrevocable Living Trusts are often created. One is the Irrevocable Life Insurance Trust, the ILIT. ILITs own life insurance policies and pay the premiums. That way, the life insurance payout is not part of the taxable estate. Another example of the Irrevocable Living Trust is a Trust setup to contain money for people receiving government benefits.
The Irrevocable Testamentary Trust is an advanced Trust in Estate Planning Trusts that is used for benefits planning. It is typically used to move assets in a Trust through a Will and keep a person qualified for Medicaid.
This was a quick, whirlwind tour of Estate Planning Trusts.
More Information on Estate Planning Trusts
Feel free to call with your questions or to get my free book, “Secrets of Excellent Estate Planning”. The book is also available on my website.
I will show you how to protect what you have today, and what you leave your kids tomorrow. You’ll be able to take advantage of my estate planning legal strategies without you or your loved ones having to deal with Probate Courts, long delays, and death tax.