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4 kinds of trusts to protect your interests

On Behalf of | May 13, 2024

A will only protects your assets so far. With just a will, your estate could be taxed or challenged and the distribution process could be delayed with probate. 

You may find that a trust will benefit you more. A trust can protect your interests and give you a versatile set of tools to better control how your assets are used. Here is what you should know:

1. Charitable trust

A charitable trust allows the grantor to donate funds to charities, private organizations, nonprofits or research programs. This is a great way to give back to the community and continue supporting a cause long after the grantor has passed away. The grantor can set up a charitable trust to disperse assets on specific dates. The donations can be a set amount or a percentage of the remaining funds in a trust. 

2. Pet trust

Many grantors worry about what will become of their pets when there is no one there to care for them. However, a grantor can create a pet trust to care for their pets’ needs. Funds in a pet trust can be used for several purposes, such as a pet’s vet bills, grooming, care and basic needs. A guardian can be named to help ensure a grantor’s pets receive the appropriate care.

3. Spendthrift trust

A beneficiary may not be financially knowledgeable. In other words, a beneficiary may squander an inheritance despite a grantor’s best intentions. A spendthrift trust allows a beneficiary to access funds in an account, however assets are released incrementally. This can help limit a beneficiary’s unwise spending habits. 

4. Special needs trust

A special needs trust is for those who receive supplemental income or health benefits from government programs. Any other kind of trust could cause a beneficiary to lose these benefits. With the use of a special needs trust, the beneficiary can still access some funds, but only enough to keep them on their medical care or income benefit programs.

You should know how trusts work and what kind of trust options you have at your disposal. You can learn more by reaching out for legal help.