While many people in Louisiana understand how important it is to have a will, fewer may be familiar with the benefits of trust. One of the biggest misconceptions is that trusts are only for the very wealthy. However, the reality is that there are a number of different trusts that can be very useful during estate planning.
What is a trust?
At its most basic, a trust is a type of legal document that a person may put his or her assets into. Those assets then belong to the trust and not the person who created it — the trustee. Trusts generally have at least one beneficiary, too. The beneficiary is the person who will receive any benefits of the trust.
Revocable vs. irrevocable
A trust can be either revocable or irrevocable. A revocable trust — also called a living trust — can be amended, changed or revoked during the trustee’s lifetime. An irrevocable trust cannot be modified or revoked after it has been created.
What about other types of trusts?
In estate planning, trusts are often used to leave inheritances for heirs. However, this is far from their only use. Just consider some of the following types of trusts:
- Charitable trusts
- Special needs trusts
- Spendthrift trusts
- Tax by-pass trusts
- Asset protection trusts
Estate planning can be an emotional process, as it usually requires a person to consider his or her own death. Dealing with more complicated matters — such as trusts — during this time can be difficult for some people. Those who are interested in learning more about trusts but also feel overwhelmed by this process are often well-advised to seek guidance from a knowledgeable counsel who is familiar with Louisiana estate planning laws.