What are the types of trusts?

Trusts are an important part of estate planning, especially in Minnesota. A trust is a legal document that allows an individual to set aside assets to be managed and distributed for the benefit of someone else, such as a family member or a charity. There are various types of trusts that can be set up to meet different needs. The most common type of trust is a revocable living trust, or RLT. With this type of trust, the individual making the trust (the grantor) can add or remove assets, change beneficiaries, or even terminate the trust. Another type of trust is an irrevocable trust. These trusts cannot be changed, so it is important to make sure the trust meets the needs of the grantor before signing the document. These trusts are often used to reduce taxes or protect assets from creditors. A third type of trust is a special needs trust. These are typically used to provide financial support for a person with a disability or special needs. The trust assets are managed so that the beneficiary does not lose eligibility for certain government benefits. Finally, an individual can create a testamentary trust. This type of trust is created through a will and is usually used to provide for the care of minor children following the death of one or both parents. Assets in these trusts are usually managed for the benefit of the minor children until they reach the age of majority. No matter what type of trust an individual chooses to set up, it is important to work with a qualified estate planning attorney to ensure that the trust meets the needs of the individual and their beneficiaries.

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What are the types of trusts?

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