Many Washington residents may be hesitant to think about their estate planning in part because it may force them to come face-to-face with the concept of death. However, Forbes suggests that estate planning can actually have less to do with death than it can have with giving people control over their assets and estates.
There are different types of trusts and the terminology used to describe them can sometimes be confusing to people. Understanding these can be important before diving into the process of developing a trust. One of the first things that needs to be decided is whether to determine or not a living trust or a testamentary trust would be needed. A living trust is also referred to as an inter vivos trust.
A living trust is one that takes effect immediately upon being created even while the person is still living. CNN Money explains that an inter vivos trust may be revocable or irrevocable. With a revocable living trust, a person may edit it at any time. This allows life changes to be accommodated such as a divorce, birth of a new child or grandchild or even the purchase or sale of major assets. With an irrevocable trust, no such changes are allowed unless both the beneficiary and the trustee agree to them.
An alternative to a living trust is a testamentary trust. This is basically part of a will and only takes effect upon a person’s death. A will may be amended by a person before they die.