A trust is typically created in your life to survive your death. It may also be made using your will after your death. Assets put in a trust belong to it and not to the trustee. They remain under the instructions and rules of the contract. In general, a trust covers property rights held by a fiduciary for someone else’s benefit. The person who holds the property’s title is called a trustee.
In most cases, people making wills in Townsville use revocable trusts, but a trust can also be irrevocable. A revocable trust is created when the trustmaker is alive and may be revoked or changed as they wish. Irrevocable trusts, on the other hand, cannot be altered, repealed or even modified after creation. The following trusts fall under these two blanket categories:
Asset protection trust
As the name suggests, this trust protects the maker’s property from claims by future creditors. They are often drawn in countries different from that of the maker. However, these trusts do not have to move the assets to the jurisdiction of the trust. The idea here is to inoculate the assets from any creditor attacks. The structure of these trusts is such that they cannot be revoked and the trustmaker never benefits. Undistributed assets have no risk of attack under this trust.
Charitable trust
In this case, the charity in question or the general public is the beneficiary. Generally, a charitable trust will be established as a part of an estate plan to avoid paying estate taxes or the imposition of gift taxes. If the trust is funded while the grantor is alive, it serves as a tool for financial planning. It affords the trustmaker benefits all through their lifetime. Additionally, they get rewards for their altruism. Most charities will honour their donors.
Constructive trust
Here, the trust is implied. The trust is made by courts and is meant to cater to specific circumstances or needs or facts. A court could decide, for example, that even if there was no formal trust declaration, there was intent by the property’s owner to use the asset in that particular way or to assign it to someone. The person can take the legal documents for the property. However, sometimes courts have to make equitable considerations to include everyone with stakes in the asset.
Special needs trust
In this case, the beneficiary receives benefits from the government and the trust is used to protect them from no longer receiving those benefits. This trust must be permitted under set Social Security guidelines. For example, the beneficiary does not have control over how much and when they get the trust distributions. They can also not revoke it. Ordinarily, a person getting government benefits will be disqualified if they receive an inheritance, for example.
Creating a trust is an excellent way to keep your assets in the family and make sure that your family is secure. Depending on what you want, a trust can be complex or straightforward. An estate lawyer will help you to decide on your way forward as you create your will.
