How do trusts work in estate planning?

Can you explain how trusts work in estate planning?

Sure! Trusts are legal arrangements where one party holds property for the benefit of another. They can help manage assets and ensure they are distributed according to your wishes.

What are the different types of trusts?

There are several types of trusts, including revocable trusts, irrevocable trusts, and special needs trusts. Each serves different purposes in estate planning.

How does a revocable trust differ from an irrevocable trust?

A revocable trust can be altered or revoked by the grantor during their lifetime, while an irrevocable trust cannot be changed once established, providing more asset protection.

What are the benefits of using a trust in estate planning?

Trusts can help avoid probate, provide privacy, and offer control over asset distribution. They can also reduce estate taxes in some cases.

How do I set up a trust?

To set up a trust, you typically need to draft a trust document, choose a trustee, and fund the trust with your assets. It's advisable to consult an estate planning attorney for guidance.