{"id":935,"date":"2017-12-04T19:08:10","date_gmt":"2017-12-04T19:08:10","guid":{"rendered":"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/?page_id=935"},"modified":"2022-08-03T22:49:49","modified_gmt":"2022-08-03T22:49:49","slug":"estate-planning-trust-types","status":"publish","type":"post","link":"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/blog\/estate-planning-trust-types\/","title":{"rendered":"Estate Planning Trust Types"},"content":{"rendered":"
A trust is something you can create while you\u2019re alive to plan for your death. It can also be formed after death or created with your will. As soon as you put any assets into your trust, they do not belong to the trustee you\u2019ve assigned, but the trust itself. This means the assets stay subject to the trust contract\u2019s instructions and rules.<\/p>\n
A trust is basically a property right held by one party to benefit another. The title for the trust property is held by the trustee, while the person receiving trust benefits is called the beneficiary. There are quite a few different trust types, but the most common ones are irrevocable and revocable. Let\u2019s go over each of those first and then look into some of the other types.<\/p>\n
An irrevocable trust may not be revoked, modified, changed, or altered once it\u2019s been created. As soon as a property has been transferred to this type of trust, no one can remove the property from the trust, including the trust creator.<\/p>\n
\u201cWhile traditional irrevocable trusts usually only had one or perhaps a small group of trustees that managed all of the administrative details of the trust and its corpus, today\u2019s irrevocable trusts will often divide those tasks among a much larger group of people,\u201d said Mark P. Cussen<\/a>, financial planner and author. \u201cThis allows for a more efficient division of labor and a higher level of management expertise.\u201d<\/p>\n These type of trusts are made by the trust maker while they are alive and may be revoked entirely, modified, changed, or altered. Also known as living trusts, these involve transferring a property title to a trust. Serving as the trustee initially, the trust maker has the ability to change this or remove that property from the trust conditions while they are alive.<\/p>\n A revocable trust is very useful for avoiding probate. If asset ownership is transferred to this type of trust when the trust maker is still alive and belongs to the trust when the trust maker passes on, the assets are safe from probate.<\/p>\n \u201cThe main reason for this type of trust is to bypass the probate process upon your death. Assets will pass directly to all of the beneficiaries listed in the trust,\u201d said Dan Crimmins<\/a>, a financial advisor in New Jersey. \u201cOther reasons are to appoint someone to manage your affairs if you are still living but mentally incapacitated, or for privacy reasons \u2013 unlike probate, which is a court procedure with a public record, the details of your assets and beneficiaries are spared from public scrutiny.\u201d<\/p>\n Revocable trusts shouldn\u2019t be considered a technique for protecting assets, however, as any assets added to the trust when the trust maker was still alive will be available to creditors of the trust maker. But a revocable trust will make it a bit harder for creditors to access them since they would have to petition a court order to do so. Usually, a revocable trust will evolve into irrevocable when the trust maker passes on.<\/p>\n These types of trusts benefit the public or a specific charity. They are typically established in an estate plan to avoid or lower gift and estate tax. You might find a CRT (Charitable Remainder Trust) a useful tool for financial planning as this can give you valuable benefits. Along with the financial advantages, there\u2019s also the honor that some charities give to donors who name their organization as a CRT beneficiary.<\/p>\n This type of trust is made for a beneficiary and doesn\u2019t allow them to pledge away or sell interests related to that trust. It\u2019s protected from creditors of the beneficiary until the property in the trust is distributed to the beneficiary.<\/p>\nRevocable Trusts<\/h2>\n
Charitable Trust<\/h2>\n
Spendthrift Trust<\/h2>\n