Understand the Different Kinds Of Trusts

 There are many types of trusts. The main design of most of them is to avoid the court system no matter what happens in the future. Going through the court system is almost always more expensive and time consuming than using a trust. In general, a revocable trust can be changed after you set it up and an irrevocable trust cannot be changed once you set it up. 

What is a Living Trust?

A Living Trust is a piece of paper, similar to a will, which sets out where your assets go when you pass away. A Living Trust, also known as a revocable trust, is designed to avoid probate. A Living Trust can be amended and revoked at any time. That means you can change your mind about who will be in charge and who you are going to leave your assets to when you die.

What Is a Life Insurance Trust?

Sometimes it is important not to have the death benefit of a life insurance policy counted as part of your estate for estate tax purposes. A Life Insurance Trust can be used to shield or legally hide the death benefits from the IRS.

What Is a Minor’s Trust?

A Minor’s Trust is usually set up inside a Living Trust. A typical situation would be Mom and Dad set up a Living Trust and upon their death they want their assets to go to their children. The parents decide how old a minor will be, who is in charge of the money (called a trustee) and how the money can be used. In Arkansas, the youngest a minor can be is 18. The most common age clients tend to pick is age 25. That means that before the age of 25, a trustee is in charge of the assets.