Estate planning attorneys often recommend a form of trust to help transfer assets or manage probate. There are many forms of trusts available to you to accomplish multiple goals.
Following are brief details about three commonly used trusts:
Irrevocable Life Insurance Trust
A death benefit from a life insurance policy can be a tremendous help for a family. However, a size-able benefit can also inflate an individual’s taxable estate. If this type of trust is owned, the death benefit is paid to the trust, which ultimately allows the benefit to be passed on to beneficiaries estate-tax free.
Revocable Living Trust
This form of trust ownership allows an individual to distribute assets according to personal wishes by avoiding probate. You can remain the trustee during your lifetime and appoint a successor to take over responsibilities after you die.
Charitable Remainder Trust
This is an irrevocable trust that allows you to support beneficiaries with income generated by your assets for a specified period of time or for their lifetime. After the time passes, remaining assets pass to a charity or charities named in the trust.