In the world of Melbourne estate planning, there is such a wide array of choices, that many people feel intimidated by this process. Working with an experienced attorney is the best way to ensure that you’re making the best choices for your situation, but it’s also a good idea to do some research to narrow down some potential options for protecting your assets. A trust is a legal document that is designed to protect and allocate financial assets, and can be active during a person’s lifetime, as well as after their death. There are nearly a dozen different types of trusts, which serve slightly different purposes.
First off, two of the main categories of trusts are revocable and irrevocable trusts. Revocable trusts are sometimes called “living trusts” and these documents can be altered or revoked at any point during the person’s lifetime. These trusts can help you avoid the process of probate, but not necessarily safeguard all your assets, as these will still be accessible by creditors. As you may guess, an irrevocable trust is a trust that cannot be changed or revoked after it has been created, not even by the trustmaker.
Charitable trusts are set up to benefit a particular charity or the public at large, and many people put money into these trusts in an effort to avoid or reduce the imposition of estate or “gift” tax. These trusts can be a valuable part of your estate planning in Melbourne, and can have personal and financial benefits over your lifetime.
An asset protection trust is a type of safety net for people who wish to shield financial assets from creditors. These trusts are typically set up in countries outside of the U.S., and are usually subject to temporary irrevocable terms, with the trustmaker not as a current beneficiary. In some cases, these trusts may be helpful for locking away significant assets for a period of time.
For those wishing to set up bank accounts or investments for another, a totten trust may be a viable option. Totten trusts are simple to make, allowing the grantor to set aside money in a financial institution, “in trust for” another person or entity. These trusts are safe ways to transfer assets, and are not subject to probate.
These are only a few of the many trusts available today, so make sure you work with a qualified estate planning attorney to determine what is best for your situation. When you’re ready to learn more about trusts or other aspects of estate planning, reach out to us at Harnage Law and request your free consultation!