While planning for death can be overwhelming, it is a very important thing an individual can do for themselves. By creating an estate plan, the individual can be in control of what happens to their personal assets and belongings when they pass away. Part of creating an extensive estate plan may include setting up a trust. A person who creates a trust is known as the “trustor,” while the person who benefits from the trust is the “beneficiary.” There is a third party involved who manages the trust. This individual is known as the “trustee.” A trust is an arrangement that allows the trustee to take care of assets for the beneficiary. In Alabama, there are many ways a trust can be created.
Benefits of a Trust
Creating a trust is different than other estate options, leading to certain benefits. Because it is possible for trusts to avoid probate, a beneficiary may gain access to the trustor’s assets faster than they would in a will. Trusts are also tax-friendly, which saves the beneficiary from some legal costs. With the creation of a trust, an individual can control their wealth by deciding who their estate is given to. This also allows them to ensure their estate ends up in the hands of their choosing after they pass.
Irrevocable vs. Revocable Trusts
There are several different ways a trustor may choose to create a trust for a beneficiary. The type of trust they choose is dependent upon what assets they wish to leave behind as well as the amount of control they want to have over the trust. In the state of Alabama, there are two main types of trusts.
- Revocable Trust: This type of trust may be updated or terminated at any time, as long as the trustor is of sound mind to do so.
- Irrevocable Trust: This type of trust requires the trustor to give up their rights to the trust. This means they cannot change the trust without the consent of the beneficiary.
Other Types of Trusts
Outside of revocable and irrevocable trusts, there are various other trust options available for trustors. Each trust has a different purpose, so it is important to have an attorney guide you towards the best option for your estate. Other common trusts that people choose in New York may include:
- Asset protection trusts
- Life insurance trusts
- Testamentary trusts
- Inter vivos trusts
- Special Needs Trusts
- Charitable remainder trusts
- Charitable leads trusts
- Supplemental needs trusts
- Generation-skipping trusts
- Qualified personal residence trusts
Contact our Firm
If you wish to create an estate plan and are seeking a legal representative to guide you through the process, contact the Law Offices of Stone Crosby, P.C. today.
Stone Crosby, P.C. has proudly served clients in Alabama for over 100 years. Our firm has experience handling matters including divorce and family law, estate planning and administration, business law, employment law, class actions, consumer protection, business law, real estate law, among many others. If you require quality legal representation, contact our firm today to schedule a consultation.