What are the types of trusts?

Trusts are a form of legal agreement in which a person or institution (referred to as the “trustee”) holds legal title to property for the benefit of another party (the “beneficiary”). Trusts are generally used to manage and protect property for beneficiaries, such as children or other family members. In New Hampshire, there are several types of trusts that can be used. One type of trust is a living trust, which is established during the trustmaker’s lifetime. This type of trust is generally revocable, meaning the trustmaker may alter or terminate the trust as long as they are still alive. Living trusts are often used to avoid probate, which is a process in which a court determines the legal validity of a will or trust agreement. The second type of trust is a testamentary trust, which is established when the trustmaker dies. This type of trust is typically irrevocable, meaning it cannot be changed after the trustmaker has passed away. Testamentary trusts can be used to manage assets such as property or investments, and they often include stipulations about how the assets should be used and who should receive them. The third type of trust is a special needs trust, which is used to provide financial support for a person with a disability. Special needs trusts are typically irrevocable, and they are specifically designed to provide financial security for beneficiaries while ensuring they retain their eligibility for government benefits. Lastly, New Hampshire also recognizes charitable trusts, which are created to benefit a specific charitable cause or organization. Charitable trusts are typically irrevocable and can serve as a way to manage assets while providing tax advantages for the trustmaker.

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