If you’re planning your estate, you will find that there are different types of trusts. These financial agreements involve the trustor (in this case, you), your beneficiaries, and the trustee, who manages the assets until your passing. To help you start determining which is right for your needs, here’s an overview of some of the most common types. 

5 Types of Trusts

1. Living

Also known as an inter-vivos, this type of agreement is made by the trustor during their lifetime and allows the trustee to manage their assets. This enables belongings to be easily transferred to the beneficiary upon a person’s death, eliminating the need for probate.

2. Testamentary

Sometimes referred to as a will trust, this document is created upon the death of the trustor. Typically, this is generated by the executor named in the will and provides information about how the assets will be distributed. This agreement cannot be altered, and is commonly chosen when beneficiaries are young children.

3. Revocable

Like living trusts, revocable agreements are made during the trustor’s lifetime. If they wish to, they can alter or cancel the document at any time. Until their passing, the trustor, beneficiary, and trustee are all the same (you). A person may also name a co-trustee. Upon death, the assets will be managed by an appointed trustee, who will distribute them appropriately among the beneficiaries.

4. Irrevocable

Unlike the previous option, irrevocable agreements cannot be modified during the trustor’s lifetime nor after their passing. While these arrangements require certainty on the trustor’s part, they have one unique benefit: they often come with minimal estate taxes. As such, they are a popular estate planning document.

5. Unfunded

These unique trusts do not have assets attached to them. They can be set up to become funded at any time. To do this, the trustor must simply transfer their assets to the trust during their lifetime or arrange for a transfer to take place after their passing. This information can be included in the estate planning documents. 

If you’re planning your estate and seeking professional expertise, turn to Alan A. Panek Law Office, S.C. Serving the state of Wisconsin, this office is concentrated in estate planning and provides detail-oriented services to help you ensure your assets are managed with the utmost care. Explore their practice areas online or call (715) 421-4900 to schedule a consultation.