4 different types of trusts

A will is a legal document that allows people to name beneficiaries. These beneficiaries have a legal right to assets in an estate. However, if the will is missing or contested, beneficiaries may end up waiting a long time before settling an estate, which can also cost lots of legal fees. 

As you make your estate plan, you may consider utilizing trusts. A trust is a legal document that entrusts assets to a trustee. The trustee is responsible for distributing assets to beneficiaries. This process can help you avoid probate, disputes and lower taxes. Here’s what you should know about the different kinds of trusts:

Charitable trusts

If you’re someone who donates to charities, your generosity doesn’t have to end after you pass away. A charitable trust can be set up to distribute assets to independent organizations, charities and research programs at regular intervals. 

Pet trusts

If you have a pet you need cared for after you pass away, a pet trust can help fund their needs. Your pet trust may help pay for your pet’s shelter, food, clothing, grooming, vet bills and training. A pet trust may also name a guardian to take care of your pet.

Generation-skipping trusts

If you’re one to think about the future, then you may be thinking about the next generation. You could set up a generation-skipping trust that helps support your grandchildren or great-grandchildren. Assets in this trust could also be used to fund their education needs.

Spendthrift trusts

If you want your estate to go to someone close to you, but you know they aren’t good with finances, then you may consider making a spendthrift trust. A spendthrift trust limits how much of an estate a beneficiary has access to. This can help prevent an estate from being lost to a risky investment move.

It’s hard to know what trust is right for you. As you explore your trust options, you may need to reach out for legal help.