A revocable trust allows you to give a trustee the right to hold and manage assets until instructed. Typically, this means that once the grantor passes away, the trustee has the responsibility to give assets to beneficiaries. A revocable trust can be altered by the grantor at any time. Once the grantor passes away, the trust becomes irrevocable and can’t be altered without the beneficiary’s consent.
A revocable trust is just one of many different types of trusts. Other trusts can have unique legal wordage that helps the grantor curate exactly how they want their assets to be handled or used. Here are four examples:
Charitable trusts
Assets in a charitable trust can be used for charities, such as private organizations, research programs or community funds. These charities could benefit from a fraction of an estate’s value at specific dates.
Pet trusts
A grantor may have a pet, such as a puppy, a fish with a long lifespan or a turtle that’s expected to outlive the grantor. The grantor can make a pet trust so that funds are used for their pet’s prolonged care. These assets may be used to finance a pet’s grooming, food, shelter, vet bills and the caretaker’s compensation.
Incentive trusts
An incentive trust can allow a grantor to make conditions that must be met by beneficiaries before they can access any trust funds. Many people make incentive trusts to help fund a child’s education or wedding, which would limit assets being wasted.
Special needs trusts
A beneficiary may have access to health benefits or supplemented income that also limits their income and savings. An inheritance could cause them to lose these benefits. A grantor could make a special needs trust that limits a beneficiary’s access to funds so that they can retain their health or income benefits.
Learning more about trusts could require help from someone experienced in the law.