Are you aware that trusts serve many different purposes? This is why trusts are not “one size fits all.” Not everyone can fit into a size small in clothes, and not everyone fits into a one-size estate plan in Georgia. For example, some people need to set up a revocable trust and others may benefit more from an irrevocable trust. Even under these two categories—revocable and irrevocable—there are many different types of trusts to meet different people’s needs.
Everyone’s finances, families, relationships, and lives are different, which is why there are many different reasons why people set up trusts, which include:
- Estate planning. In order to leave assets to children and beneficiaries, trusts frequently are part of wills, and the executor of the will is typically the trustee.
- Privacy. The terms of a trust are private, whereas the terms of a will are public.
- Estate tax avoidance. Generally, wealthy families that want protection from estate taxation put assets in an irrevocable trust.
- Life insurance tax avoidance. In order to get around paying estate taxes on life insurance assets, an irrevocable life insurance trust can be created.
- Spendthrift protection. These trusts are created so that creditors cannot get to the funds in the trust, as well as to protect beneficiaries.
- Asset protection. Different types of trusts can be set up to avoid the effects of bankruptcy or taxation on the beneficiaries.
- Co-ownership. When property is owned by two or more people, it needs to be facilitated by a trust to protect the partners.
To find out which type of trust might be right for your needs, speak with an experienced Peachtree City estate planning attorney at Shane Smith Law at (770) 487-8999 for your estate planning needs.