There are several options available for you to set your estate plan up so your loved ones are cared for when you pass away. While you probably know about writing a will, you should also consider trusts.
There are two types of trusts – irrevocable and revocable. An irrevocable trust can’t be changed without the permission of the court or beneficiaries. This is the opposite of a revocable trust, which can be changed. The benefits of the irrevocable trust may outweigh the inability to change the terms.
1. Specific rules can be outlined
You can set specific terms for the distribution of the trust. This enables you to have control over when your loved ones get the contents. You may choose to include age distributions, milestone distributions or many other options. Special types of irrevocable trusts, such as special needs trusts, serve specific purposes.
2. Protection from creditors
One of the primary benefits of an irrevocable trust is that your creditors can’t claim the contents of the trust once it’s funded. This is because you give up control of the trust when you establish and fund it.
3. Privacy for the beneficiaries
An irrevocable trust provides considerable privacy for the beneficiaries because these trusts don’t go through the probate process. The estate plan components that go through the probate process become part of the court record, which means anyone can find out the terms of those components.
Discussing your wishes with someone familiar with the situation can help you learn how an irrevocable trust can benefit your loved ones. This can give you peace of mind since you know your wishes are being followed.