Whether you or someone you know are creating a plan for your estate or with one of the funeral homes in Berkley, MI, a trust might be a great addition to include if you have many assets. Each trust has a specific purpose and can be highly beneficial, so let’s look at a few of the most popular types.
A testamentary trust, often known as a will trust, is an agreement made for any beneficiary once the creator has passed on. The details of how the assets will be received will be listed in the document, and this type of trust is carried through by an executor who manages the estate after the will has been created.
A revocable trust will be created while the person is still alive and can be terminated, altered, or changed by the trustor. It’s typically set up to transfer assets outside of the probate process. In most cases, the beneficiary, trustor, and trustee are often the same individual who manage their investments but have beneficiaries listed if they pass away.
Irrevocable trusts cannot be changed once they have been created. This type will list assets that cannot be taken back by the trust store and are typically used to reduce or remove any estate taxes upon transfer. These are one of the more popular types of trusts because the assets are completely transferred from the trustor’s name to the beneficiaries.
An insurance trust will let the trust store combine its policy and the trust keeping it free from any taxation in the estate. This type of trust does not allow changes, or it should be canceled and is irrevocable.
Charitable Trusts have nonprofits or charities listed as the beneficiary, and in most cases, this type would be created during the individual’s lifetime, and once they pass away, the assets would go to the organization listed, keeping it free of gift taxes and reducing estate taxes. This type of trust could also be included in a normal trust where the beneficiaries would receive a certain amount, and the rest would go to the listed agency.
The credit shelter trust is also known as a family or bypass trust. It allows the creator to grant beneficiaries a certain amount of funds or assets up to the tax exemption amount for the estate. In essence, it allows the trust store to give the beneficiaries a remainder of the estate without needing to pay taxes and is popular because the estate remains tax-free forever, even if it increases.
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These are just a few types of trusts you can choose from, and it is recommended to work with a lawyer to ensure you are creating the right one for your needs. And whether you are planning or have just experienced a loss, we are here to help. Our team is one of the trusted funeral homes in Berkley, MI, and we offer exceptional services that our clients depend on. We have been providing services for our community since 1906, so contact us today to get started.