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Types of Trusts Available in Missouri

On Behalf of | Jan 5, 2022 | Firm News

You may have heard that trusts are useful estate planning tools. However, you may have no idea what a trust is or if you need one.

Here is a primer to educate you about the varieties of trusts:

Revocable living trusts: A revocable living trust is a document that allows your family to avoid probate court proceedings after you die, which can save your family time, money, and aggravation. These trusts function like wills because you use them to leave your property to your loved ones. If you change your mind at any time before you die, you can easily change the terms of the trust or revoke it.

Irrevocable trusts: These are trusts that cannot be terminated once they are created. In contrast, revocable trusts can be terminated at any time, at least until they become irrevocable at the death of the maker.

Special needs trusts: These trusts are used to protect the property of individuals with disabilities while maintaining their eligibility for government services. If a person with special needs inherits money, it will make him ineligible to receive government aid. So, the family creates a special needs trust and the individual gets to use the money during his lifetime while any left over at the end of his lifetime will go to the government.

Charitable trusts: These trusts make larger gifts to charities and, at the same time, achieve income and estate tax savings for the person who creates the trust. They are usually set up during the grantor’s lifetime and are irrevocable. If you make only a few small gifts to charity, then a charitable trust probably isn’t worth it. You should understand that charitable trusts require that you give up legal control of your property, and you cannot later change your mind and regain legal control over the property of the trust.

In addition, there are many other types of trusts, such as:

  • credit shelter trusts
  • generation skipping trusts
  • irrevocable life insurance trusts

Consultation with an experienced wills and trusts attorney will prove beneficial to finding the best way to pass along your property to your heirs.