For a lot of people, the end goal of estate planning is relatively simple. They don't want to do anything extravagant. They're not looking for some out-of-the-box solutions. They just want to give their children a better life.
People often understand the basic idea of using a trust in an estate plan. You put your assets into the trust, you write out instructions on how the trust should operate, and then the assets get used or distributed in accordance with those rules. A trust gives you control over your assets even when you are not around to make those decisions yourself.
According to recent reports on the financial situation that American college students face, it's not looking too good for them. They have in excess of $1 trillion in debt. While not all of that debt comes from student loans, they're the main issue.
Are you considering creating a trust? There's a lot that goes into drafting and funding a trust. As a trust grantor, you will need to understand how the law governs trusts. You need to determine who the beneficiaries of the trust will be, what resources you want to put in the trust and much more. Let's take a look at the different types of irrevocable trusts available for you to create in your trust.
Living trusts are identified by the word "living" because you create them while you're alive, and you have the ability to change them while you're alive. After your death, the trust will be set in stone and no one will be allowed to change it. This flexibility while you're still alive is one of the many benefits received from an estate planning perspective when someone chooses to set up a living trust.
An irrevocable trust is just like it sounds — irrevocable. In other words, once you create the trust and transfer assets to it, you can't dismantle the trust and take back the assets. In this sense, the trust cannot be changed, modified or taken apart by anyone, including the grantor who initially created it.
When creating an estate plan, you'll come to find that there are many ways to pass on your assets upon your death. Although it's a big decision, with the right information guiding you, it won't be long before you have a clear idea of what to do next.
Deciding how to leave your money to your heirs is important. Many people assume that it simply involves writing a will stating who gets what assets, and that's the end of it.
Adding a trust to your estate plan is a big decision, as this will alter the moves you make today and in the future. It also changes what happens to your estate upon your passing.
Not all trust grantors need to fund spendthrift trusts for their heirs, but they can be ideal when the heirs have proven themselves to be less than fiscally responsible.