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Sitting down to create an estate plan is a task that many adults don’t look forward to, but it’s one that’s crucial if you want to pass down assets to your loved ones or have a say in what will happen if you become incapacitated. For some people, creating trusts is an important step in the estate planning process. 

One component of a comprehensive estate plan is trusts. While some people are mystified by this estate planning tool, it’s one that’s very helpful for many individuals. 

Irrevocable versus revocable

Trusts are either revocable or irrevocable. You can modify a revocable trust when you want to, but it doesn’t provide protection from creditors. You can’t modify an irrevocable trust without the permission of the beneficiaries, but it provides protection from your creditors.

Trusts must be funded

Establishing a trust doesn’t do any good if you don’t fund it. The protections of the trust go into effect when it’s funded. In the case of an irrevocable trust, creditors could come after the assets until you transfer them to the trust.

Privacy is beneficial

One of the primary reasons some people turn to trusts when they’re creating an estate plan is because they want their loved ones to have privacy after they die. A trust doesn’t have to go through the probate process, so there won’t be a public record of what they received. 

Your estate plan should be fully customized based on the goals you have. Working with someone who understands those and how to best make them a reality is imperative. You deserve to rest easy knowing that your loved ones will be taken care of when you pass away.