A trust is a legal document that allows people to distribute assets according to their instructions without causing beneficiaries to go through probate or disputes. A revocable trust is one of the more common kinds of legal documents. Grantors can alter revocable trusts at any point until their passing, which then causes a revocable trust to become irrevocable.
Revocable trusts have some limitations, but they are not the only choice. People who are considering making trusts may want to consider their options.
1. Pet trust
Grantors can set aside assets for the continued care of their pets. Funds in a pet trust can be used for the grantor’s pet’s needs, such as food, vet bills, grooming, clothing, sheltering and toys. The grantor can set aside instructions in the trust for the caretaker of their pet.
2. Spendthrift trust
If a grantor fears that a beneficiary will mismanage assets from a trust, they can create a spendthrift trust. A spendthrift trust limits how many assets beneficiaries get from a trust. As a result, the funds in the trust can’t be spent all at once, but the beneficiary can still live comfortably.
3. Generation-skipping trust
A grantor can plan out a trust for future generations with a generation-skipping trust. This trust skips one generation for the benefit of the one after. This can be used, for example, for a grandchild’s education.
4. Charitable trust
Many people donate to charities. A charitable trust can be used so that a grantor can donate to a charity at predesignated times.
5. Special needs trust
A beneficiary may gain supplemented incomes or health benefits. They may lose these benefits if they gain too much from an estate. A special needs trust can be used to limit how many assets a beneficiary gets so that the beneficiary can retain their benefits.
Knowing what trust is right for you can be difficult. you may need to reach out for legal help to discuss your options.