6 Different Types of Trusts To Consider Using

Last updated on: November 17, 2022

One of the best ways to pass along assets and utilize Estate Planning is through a Trust. A Trust is an account that is funded by you, managed by a third party, and given to a recipient of your choosing at the time of your death. Unlike assets in a Will, assets in a Trust will not enter probate. Instead, they will be given immediately to your chosen recipients when you pass away.

Trusts are valued because of their ability to avoid probate, pass along assets efficiently, and contain a wide variety of assets and purposes. For just about every use you can think of, there is a Trust to do the job. So which is right for you? This is just scratching the surface, but here are 6 different types of Trusts that you should consider using:

Revocable Trust

A Revocable Trust is the most common form of Trust. It can be given to any person. It is called “Revocable” because the creator can access the assets they placed into it while they are still living. They can also change the intended recipients at any point if they want.

Irrevocable Trust

An Irrevocable Trust is another standard form of Trust. It is “Irrevocable” because once you create it, you can no longer access anything you place in it or change who it is going to. It is set in stone, unlike a Revocable Trust.

Charitable Trust

A Charitable Trust is one that is going to a charity organization rather than an individual. Charitable Trusts also tend to be Irrevocable.

Special Needs Trust

A Special Needs Trust is one designed to benefit a loved one with special needs who may not be able to properly handle being given the assets directly or would not be properly served by probate. We’ve written a lot about Special Needs Trusts in the past – including how to provide even more than they do.

Spendthrift Trust

A Spendthrift Trust is a Trust where the intended recipient does not have direct access to use the assets as they wish. It’s normally intended for small children, but it could also be used for particularly financially irresponsible loved ones.

Qualified Domestic Trust

A Qualified Domestic Trust is intended to give a foreign citizen spouse of a United States citizen the same benefits that any other spouse would receive. It helps bypass some of the national laws of probate court to treat loved ones with different citizenship equally.

Avoiding Probate with a Revocable Living Trust

Trust attorney in New Jersey

A revocable trust can accomplish the same things as a will does while allowing the surviving family members to avoid probate. This is because a New Jersey-based revocable trust is able to virtually hold almost any asset. When all of the assets are placed in a trust and have a trustee and beneficiaries listed, there is no need to rely on a will to determine the distribution of the assets. 

After the grantor’s death, the trustee of a revocable living trust gains access to the assets immediately after the grantor’s death. The trustee does not have to wait for 10 days to go to the Surrogate Court in order to obtain access to the assets in the trust. This quick turnover allows the trustee to being paying off debts, and taxes, and distribute assets right away without waiting for anyone else. 

Sometimes, the distribution of assets can be a one-time matter. The trustee can pay them out and then their task is over. In some cases, the trustee may need to keep the trust in place and manage it until beneficiaries reach a specific age, or until everyone has exhausted all the funds.

Get the Right Trust For You

At the Matus Law Group, we know a thing or two about Trusts. If you are ready to protect your assets, your family, or your business, we can help find the best Trust to meet your needs. To get started, contact the Matus Law Group today! We’re here to provide you with compassionate and effective counsel. We have unique solutions for unique families!

Christine Matus

Christine Matus

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