Taking the time to set up an estate plan is important for adults. This is one of the key ways to help your loved ones to deal with your affairs after you pass away. Giving them the instructions to make sure they do what you want can help to reduce their stress during that time.
One way that you can do this is by setting up trusts. These let you pass down assets to your loved ones without having to go through the probate process. If you’re going to establish one or more trusts, you should learn about the difference between revocable and irrevocable trusts.
How do revocable and irrevocable trusts differ?
The primary difference between irrevocable and revocable trusts is that you can’t change or void an irrevocable trust, but you can change or cancel a revocable trust. Because of the limitations on the irrevocable trust, it offers protection against creditor claims. Creditors can’t come after the trust’s contents to satisfy your debts. If you have assets in a revocable trust, creditors can come after those assets.
Under each category of trust, there are many different types. You have to think about the beneficiaries’ circumstances and your wishes so you can determine which is right for the situation.
Setting up a trust is one of the best ways to allocate your assets to your loved ones after you pass away. Because these can be complex, it’s best to work with someone who’s familiar with them so you can ensure that you have everything in order. Doing this while you’re still of sound mind and able to make legal decisions is important, so don’t delay.