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What Kinds of Trusts Are Available?

Pennsylvania residents who are preparing their estate plans likely have a lot of questions about their options and what protections they actually need. While there are plenty of people who can probably get by with just having wills, others may want to consider trusts. What kinds of trusts are available?

There are a number of trust types out there. The most commonly used are revocable and irrevocable trusts. Both of these can protect one's assets and ensure they are passed on to beneficiaries, but they go about it in different ways. A revocable trust is something that the trust owner can change at any time, and the assets in the trust are still considered personal property. With an irrevocable trust, assets placed in the trust now belong to the trust, and the trust owner cannot change the trust document or take assets out of the trust -- except under very special circumstances.

Another common type of trust is called a charitable trust. Those who wish to give their assets away to a specific charity, or set up a charity of their own, can place the funds into this type of trust. The trust can be funded during one's lifetime or upon one's death.

Finally, the last trust type that will be discussed is the special needs trust. Individuals with loved ones who have special needs and are receiving government benefits can actually cause them to lose their benefits if they simply name them as beneficiaries on their estates. By putting assets in a special needs trust, funds can be distributed in such a way so as not to affect government benefits eligibility.

Trusts can help Pennsylvania residents ensure that their assets are protected and passed on as they would like them to be. Knowing which trust type one should utilize may not always seem pretty straightforward. With the assistance of legal counsel, the right trust for one's needs can be created.

Source: FindLaw, "Types of Trusts", Accessed on May 11, 2018