Understanding trusts and their role in a complete estate plan

Every estate plan is different as each Louisiana adult will have different goals for his or her estate after passing away and unique wishes regarding health care in case of incapacitation. Depending on what one may wish to accomplish, trusts are tools useful for ensuring specific assets are used in specific ways in the future. There are different types of trusts, and it is helpful to have a basic understanding of the benefits they provide.

The trustor is the party who creates the trust, and the trustee is the party that manages the trust. The beneficiary is the party that receives assets from the trust, and it is possible to create a trust with multiple beneficiaries. While many trusts are created during the trustor’s lifetime, there are testamentary trusts. These are created per the terms of someone’s last will and testament.

Depending on the specific goals for the trust, it can be either revocable or irrevocable. A revocable trust is one that can be changed over the course of the trustor’s lifetime, and he or she will retain the right to manage, remove, add and use assets from the trust for his or her benefit. With rare exception, it is not possible to change an irrevocable trust after it is created.

Trusts can be used to accomplish specific goals, but they can also protect the privacy of a family and help avoid probate for assets held within the trust. When creating an estate plan, it is beneficial for a Louisiana adult to consider the benefits of this estate planning tool. An assessment of individual finances and long-term objectives can help one understand how to create a plan that will be useful for years to come.