Are there different kinds of trusts?

A trust is a specific kind of estate planning tool that can complement your will and allow you to control different kinds of property that you may own. A trust allows you to transfer ownership of specific property to another person known as a trustee. The trustee will then supervise the property for a beneficiary who is named in the trust. But is there only one specific type of trust, or are there different kinds of trusts that can be used for different situations?

There are different kinds of trusts, although they primarily fall into two categories: revocable trusts and irrevocable trusts. A revocable trust, also known as a living trust, is one that is created by while you are still alive and that can be changed as needed. You can be the trustee for a revocable trust and can add or remove property from the trust during your life. One of the benefits of a revocable trust is that property placed in the trust may be able to avoid the probate process.

As its name implies, an irrevocable trust cannot be altered in any way after it has been created. Any property or asset placed in this type of trust cannot be removed even by you, the creator of that trust.

Another kind of trust is an asset protection trust. This type of trust is usually created to protect your assets from any possible creditors and is typically set up in a foreign country. An asset protection trust is created to be irrevocable for a specific length of time so that you are not the beneficiary of these assets.

There are additional types of trusts including special needs trusts, charitable trusts and constructive trusts. However, any Florida resident who is considering establishing a trust may want to speak with an estate planning attorney in order to discover the benefits of each type of trust.

Source: FindLaw, “Types of trusts“, accessed Oct. 27, 2015