Estate Planning in the New Year Using Trusts

Estate Planning in the New Year Using Trusts

With the start of a new year, are you thinking about your financial health for 2021 and beyond, including estate planning? In addition to a last will and testament, there are other tools you can use, such as trusts, to protect and transfer assets to loved ones. 


A trust can allow one person, often called the “trustor” or “grantor,” to store or transfer assets to someone else, usually called the “beneficiary.” The “trustee” is the person or entity managing the trust assets according to the trustor’s instructions. The trust can contain different assets, such as real property, investment accounts, cash, business interests, and more. 


Generally, there are two broad categories of trusts: revocable and irrevocable. A revocable trust can be changed or revoked by the grantor at any time. An irrevocable trust, on the other hand, cannot be altered, amended, or revoked, except under limited circumstances.


Within the broader categories of irrevocable and revocable trust, there are a variety of other types of trusts. There are charitable trusts which allow the grantor to transfer assets to specific charities. There are generation-skipping trusts which allow for the transfer of assets to grandchildren instead of children. Special needs trusts allow for the providing of financial support to beneficiaries with special needs without impacting eligibility for government benefits.


Choosing the right trust for you can depend on the assets you have, how you want to oversee those assets, tax considerations, and other issues. For help finding which type of trust may be beneficial to have in your estate plan, our office is here to assist. Please contact us to schedule an appointment.