The Final Tithe: Discussing Trusts

In this episode of “The Final Tithe”, I discuss the use of Trusts and how they can serve our purpose in a non-secular estate plan.In our third episode in the current series of “The Final Tithe”, I discuss the use of a Trust and how it can serve our purpose in a non-secular estate plan. A trust is an opportunity for “Grasp beyond the Grave”. Not everyone needs a trust. Those that do need a trust, should utilize an estate planning attorney to develop the trust for them. There are several different types of trusts which I have included explanations of below. I encourage you to review your stewardship needs in regards to your estate planning. We can help with that review and give you an opinion on what types of planning you should consider. Many of our final wishes can be accomplished without the need to spend hundreds or thousands of dollars on legal planning. Other times, more aggressive planning is needed. You can find our contact information at www.kingdomplanadvisory.com.

This is a sampling of different types of trusts. Please consult with a licensed professional to discuss your specific needs.

  1. Living Trusts

living trust, sometimes known as an inter-vivos trust, is one made by a trustor (grantor) during his or her lifetime, with assets or property intended for the individual’s use during their lifetime. This type of trust allows the trustor to benefit from the trust while alive, but passes the assets and property on to a beneficiary (using a trustee) upon their death. With a living trust, you are generally able to avoid probate court, provided the trust is funded.

  1. Testamentary Trusts

A testamentary trust, often called a will trust, is an agreement made for the benefit of a beneficiary once the trustor has died, and details how the assets must be endowed after their death. This type of trust is often instituted by an executor, who will manage the trust for the trustor’s decedents after their will and testament has been created. And, a testamentary trust is irrevocable (cannot be changed or altered).

  1. Revocable Trusts

A revocable trust, like a living trust, is created during the trustor’s lifetime. It is able to be changed, terminated, or otherwise altered during the trustor’s lifetime by the trustor themselves. It is often set up to transfer assets outside of probate. In this case, all three parts of the arrangement (the trustor, trustee  and beneficiary) are often the same person who can manage their own assets, but will be given over to a successor trustee and other beneficiaries upon the original trustor’s death.

  1. Irrevocable Trusts

On the contrary, an irrevocable trust is one that a trustor (grantor) cannot change or alter during his or her lifetime or that cannot be revoked after his or her death. Because this type of trust contains assets that cannot be moved back into the possession of the trustor, irrevocable trusts are often more tax efficient – with little to no estate taxes at all. For this reason, irrevocable trusts are often the most popular as they transfer assets completely out of the trustor’s name and into the next generation or beneficiary’s name. However, a living trust can be either revocable or irrevocable based on its specifications.

 

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