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

Trusts are a legal tool used in estate planning to manage assets for a person’s benefit. There are several different types of trusts, each with its own unique purpose and benefits. The most common type is the revocable trust which allows the grantor (the person who creates the trust) to make changes or revoke the trust at any time. The trust still has the same legal power to hold assets and manage them, but the grantor has ultimate control and can adjust the terms of the trust as needed. Another type of trust is an irrevocable trust, which is more permanent and cannot be changed or revoked by the grantor once it is set up. The trust still functions to manage and protect assets, but the grantor does not have the flexibility to make changes to the trust. A living trust is a form of a revocable trust in which the grantor transfers their assets to the trust while they are alive. This allows the grantor to maintain control of their assets and provide for beneficiaries while they are alive, and if they become incapacitated. Finally, an estate trust is set up after the grantor’s death and is used to manage assets for the benefit of their heirs. This type of trust often helps to prevent taxes on assets, and can be set up to provide ongoing support for heirs. In summary, trusts are a legal tool used in estate planning to manage assets for a person’s benefit. There are several different types of trusts, including revocable trusts, irrevocable trusts, living trusts, and estate trusts. Each type of trust has its own purpose and benefits, and is used in different circumstances.

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

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