There are several tools and strategies an attorney may help you use to achieve your estate planning goals. One of the most effective ways to protect your loved ones, assets, and final wishes is to establish a trust. This is a legal arrangement that allows you to appoint a trustee to hold and manage your property on behalf of your designated beneficiaries. Here are a few types of trusts you can create for different purposes.
3 Types of Trusts
1. Minor Trust
If you have young children, you can set up a minor trust to leave them property. However, you will need to appoint a trustee to oversee the property until the minor has reached adulthood—or whatever age you state.
Setting up a minor trust is a better option than leaving it to them in a will. With a will, your child would receive the inheritance once they turn 18, which may not be the best decision if you’re leaving them your house, for example. But with a minor trust, you can set the age of inheritance to what you deem best.
2. Special Needs Trust
This option is designed to help provide long-term care to dependents with disabilities. People with special needs sometimes rely on government programs for income and health care, and receiving inheritances could make them ineligible for these benefits.
Like a minor trust, you will need to pick a trustee to be in charge of the inheritance—they can oversee any property you leave them and utilize money for your dependent’s medical care and living expenses. An attorney will set up a trust to allow you to give your loved one money without disqualifying them from welfare programs.
3. Charitable Trust
If there’s a charity organization you want to become a part of your legacy, establishing a charitable trust is one way to accomplish this.
The most common trusts that fall into this category are the charitable remainder and charitable lead. The first will provide you with cash flow for a certain amount of time, then distribute the rest of the assets to charity. The second allocates specific assets to give to charity and awards what’s left to your beneficiaries.
To find out which trust is the best solution for your particular situation, contact the attorneys at Stephenson & Stephenson, PA. In business since 1984, they will guide you through the estate planning process throughout North Carolina’s Lee, Chatham, Moore, and Harnett counties. Call (919) 774-6182 to schedule a consultation, or visit them online to learn more about their legal services.