Many Oklahoma residents feel apprehensive about setting up a Trust; others feel that it simply is not worth the time. Wherever families may lie on this spectrum of opinion, many are confused about the meanings of a will or Trust altogether. Below are some accessible facts about a Trust specifically, and how having one may prove advantageous.
First, an article in Forbes explains that, as a whole, a Trust is a group of assets prepared for beneficiaries. Overseen by an appointed Trustee, the management of a Trust involves directions on how assets are to be distributed — these can include cash, property and other important belongings. A will and a Trust each have a number of benefits, but Forbes points out that Trusts can help one avoid probate, and can even prove more flexible than a will. Although potentially more costly, some families may benefit from Trusts more than others. For instance, those with minor children might want to consider Trusts, since a Trust could allow more control over when, exactly, a child receives money. In addition, Trusts can allow parents to categorize where money will go, such as education or other major life expenses.
When an individual decides to set up a Trust, they may face a wide range of selections. CNN lists the following main types of Trusts:
- Qualified terminable interest property Trust
- Qualified personal residence Trust
- Irrevocable life insurance Trust
- Credit-shelter Trust
- Generation-skipping Trust
The above selections can certainly seem overwhelming at first glance, but CNN goes on to describe the details. For families with divorces, remarriages and step-children in the picture, a qualified terminable interest property Trust may be the safest bet. For those who expect the family home to appreciate in value, a qualified personal residence Trust is ideal. An irrevocable life insurance Trust can help one pay estate costs and can provide heirs with cash. As for credit-shelter Trusts, spouses may pass on amounts to a Trust up to an estate-tax exemption, ultimately leaving the surviving spouse with a tax-free estate. Finally, one perk of a generation-skipping Trust allows grandparents to pass on varying amounts of money for grandchildren. No matter the goal, a Trust can help families in a plethora of ways.