A trust is a written legal document created by you in order to clarify your assets, dependents and heirs. The trust gives your chosen trustee a legal title to the property stated in the trust. Living trust simply refers to the fact that it was created while you are alive, rather than after your death. There are several different types of trusts that can be created.
A revocable living trust
A revocable trust is created during the lifetime of the trust maker and can be modified, altered, changed or revoked entirely. These trusts also help the trust maker avoid probate.
An irrevocable living trust
An irrevocable trust cannot be changed or revoked by the trust maker. Once property is transferred to the trust no one can take it out.
An asset protection trust
An asset protection trust protects a person’s assets from future creditor claims. These trusts are usually set up outside of the United States and protects assets from a creditor attack.
A charitable trust
A charitable trust benefits a charity or the public in general. Charitable trusts are usually created to lower estate and gift taxes.
A constructive trust
A constructive trust is an implied trust that is established by a court and determined by certain circumstances. The court might establish a trust if there was an intention on the property owner that the property would be used for a particular purpose or by a particular person.
A special needs trust
A special needs trust is made for a person who received government benefits so that the person with special needs doesn’t get disqualified from receiving government benefits. This trust is completely legal and permitted under the Social Security rules.
A tax by-pass trust
A tax by-pass trust allows one spouse to leave money to the other and it limits the amount of Federal Estate tax that would be payable on the death of the second spouse.