Trusts can be a very effective tool to transfer assets to loved ones. They are very flexible in many ways and can accommodate many different situations. The cost to set up a trust is often higher than a will but most trusts will avoid the probate process and the fees often associated with it. Usually the main reason for a trust is so the creator can have some control over the trust assets once they are gone by leaving written instructions within the trust. If you are interested in setting up a trust, an experience trust attorney is a must to assess your situation and determine what is the best solution for your individual needs. Contact Duepner Law today to set up an appoint to discuss your goals.
If thinking about setting up a trust, here is few common types of Indiana trusts:
1) Revocable Living Trust- A revocable trust is often established to avoid the probate process. It is very common type of trust that can be used for estate planning purposes
2) Irrevocable Living Trust- Created to transfer or manage estate assets of an individual that the creator of the trust wants control over. The irrevocable aspect has advantages and disadvantages. For instance trust assets are not reachable from creditors if it contains a spendthrift clause but once created its terms cannot be changed.
3) Blind Trust- The trustee is unaware of the beneficiaries. Helps to avoid conflicts.
4) Minor’s Trust. The Minor’s Trust is a simple revocable or irrevocable trust that passes estate assets to anyone under the age of majority (18). It allows the trustee to use the assets in the trust in a manner that is designated by the creator of the trust. Often this is for education purposes and living expenses. Once the minor reaches an age designated by the creator, the trust will terminate and all assets will go to the beneficiary.
5) Testamentary Trust. The testamentary trust takes effect upon the creators death. Assets are left to the trust via a will instead of an individual. This type of trust does not avoid probate.
6) Gun Trust- The NFA Gun Trust allows individuals to acquire Title II weapons and other destructive devices while avoiding lengthy and time consuming background checks. This trust allows for the transfer of weapons to and from the trust, and is agood tool to allow certain proper persons the ability to control, possess, and inherit the weapons.
7) Special Needs Trust- benefits individuals where family members want to give assets to a loved one but the loved one cannot received assets because they will lose governmental benefits. It can be modified to allow a family member, guardian or the court, to allow a special needs individual certain financial necessities to supplement resources while keeping eligibility for programs like Medicaid and Social Security.
8) Qualified Personal Residence Trust- This trust transfers the grantor’s residence out of the estate, removing it from the value of the grantor’s estate as a gift. Under the terms of the trust, the grantor can continue to live in the residence for a number of years rent free, before the beneficiaries of the trust are vested in their interests. .
18) Marital Trust. A Marital Trust creates a trust to benefit a surviving spouse and the heirs of the couple. Assets are moved into the trust when the first spouse dies, and the income generated by the assets are transferred to the surviving spouse. When that individual dies, the remaining assets go to the couple’s heirs.
20) Credit Shelter Trust- The Credit Shelter Trust allows a married individual to leave assets, usually to children and avoid probate. This trust allows each spouse to maximize their personal estate tax exemption.
34) Pay on death Trust. This trust allows an individual to put into an account and designated beneficiaries. This type of trust will avoid probate and the fees associated with it.
36) Qualified Income Trust (Miller Trust or QIT)- The Qualified Income Trust protects an individuals assets when applying for Medicaid. Medicaid has income limits that cannot be exceeded to be eligible. A QIT is an irrevocable trust that allows for income while not eliminating eligibility for nursing home care through Medicaid.
37) IRA Trust. Simply put allows the income from an IRA to go into a trust.