Estate planning is the process of designating who will receive your assets when you become incapacitated or pass away. When planning your estate, you’ll likely come across the term “trust.” If you’re wondering whether you should create a trust, follow this guide. 

What Is a Trust?

A trust is a fiduciary relationship involving a trustor (the creator of the trust), a trustee (someone the trustor trusts to manage their assets), and a beneficiary (someone who will receive the trustor’s assets).

The trustor grants the trustee the right to hold title to assets or property before they’re distributed to the beneficiary. A trust ensures that the assets or property are distributed to the beneficiary according to the trustor’s wishes. 

A trust protects your family by ensuring that your assets and property are distributed to the right people at the right time. For example, if your beneficiary is under 18, the trust will ensure that they don’t receive your assets or property until they’re an adult.

A trust can also guarantee care for a physically or mentally disabled dependent. It can protect your assets from creditors, help you avoid or decrease inheritance or estate taxes, and help your family avoid probate. 

Types of Trusts for Estate Planning

Revocable Living Trust

This trust lets you transfer your assets into it while you’re still alive. You’ll also be able to alter or revoke the trust at any time. 

Irrevocable Living Trust

As with a revocable living trust, this trust lets you transfer your assets into it while you’re still alive. However, you won’t be able to alter or revoke the trust. 

Testamentary Trust

If you choose this type of trust, your assets will be transferred into the trust according to your will when you pass away. These are always irrevocable, meaning you can’t alter or revoke them. 

 

Stephan and Associates in Xenia, OH, founded by Brian Stephan, CEO and General Manager can assist you with your state planning. These financial advisors will help you create a comprehensive trust that protects your assets and loved ones. Learn more about their services online, and call (937) 374-2002 to schedule a free consultation. 

The content of this article is for informational purposes only and should not be considered a recommendation of any particular security, strategy or investment product or investing advice of any kind. Information contained herein has been obtained from sources deemed reliable but Spire Wealth Management, LLC and its affiliates do not guarantee its accuracy. The views and opinions expressed in this article are those of the authors and are subject to change. Index information is provided for illustrative purposes only. Indexes are unmanaged, do not reflect deduction of fees and expenses and are not available for direct investment. Investing involves risk, including the possible loss of principal.

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