What are the different types of trusts and how do they work?

Trusts are legal documents, used in estate planning, that help individuals plan for their future while allowing for more control over the distribution of their assets. In Nebraska, there are four main types of trusts: revocable, irrevocable, living, and testamentary. A revocable trust is typically created while an individual is still alive and can be revoked or amended. During their lifetime, the trustor (creator of the trust) can change the terms of the trust or even revoke it altogether. Once the trustor passes away, it becomes irrevocable. An irrevocable trust is a trust that cannot be changed or revoked. This type of trust is commonly used to reduce taxes and protect assets. An irrevocable trust is often used to pass assets on to future generations. A living trust, also known as an “inter vivos” trust, is created and funded during the trustor’s lifetime. This type of trust is often used for personal reasons or to pass assets to beneficiaries without going through the legal process of probate. Lastly, a testamentary trust is set up according to instructions written in a will and is funded after the trustor’s death. Testamentary trusts are often used to manage assets for children until they reach adulthood, or to manage assets for someone with special needs. In summary, trusts are a useful tool to help individuals plan for their future and manage their assets. They are typically used to protect assets, reduce taxes, and pass assets to future generations while ensuring the trustor’s wishes are carried out.

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What are the different types of trusts and how do they work?

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