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Understanding the common types of trusts in New York

On Behalf of | Oct 3, 2022 | Estate Planning

Trusts are a valuable estate planning tool that can help you protect your assets and provide for your loved ones. There are many different types of trusts, so it is important to choose the right one for your specific needs.

Revocable trust

This type of trust allows you to change the terms or revoke the trust entirely at any time. This can be a good option if you are still working on your estate planning and are not sure what you want to do with your assets yet. A revocable trust becomes irrevocable when the grantor dies, so it is important to make sure that the terms are set the way you want them before that happens. If you have a revocable trust, you will still need to create a will to dispose of any assets that are not in the trust.

Irrevocable trust

An irrevocable trust cannot be changed or revoked once it is created. This can be a good option if you want to make sure that your assets are protected and go to the people you want them to. Having a trust can also help avoid probate, a court process that can be time-consuming and expensive.

Charitable trust

This type of trust allows you to donate to a charity and receive a tax deduction. You can also specify how you want the charity to use the funds. For example, you could set up a trust to fund a specific program or scholarship. Additionally, you can specify that the trust continues after your death.

Choosing the right type of trust is an important part of estate planning. You wouldn’t want to put your assets in a trust only to find out later that it wasn’t the right type of trust for your needs. It’s also important to understand the entire process of setting up a trust before you get started.

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