Trusts can be a confusing and intimidating topic for many people; the reason for the confusion is that there are so many different types of trusts for different purposes. A trust can be created during your lifetime and the trust can survive your death. One important thing to remember about trusts is that once a trust is created the trust belongs to the trust itself, not the trustee, and the trust remains subject to the rules and instructions of the trust contract. In simple terms, a trust is nothing more than an arrangement where one person agrees to hold property for the benefit of another. There are quite a few different types of trusts, but we will discuss the basic types of living trusts below.
It’s important to note that living trusts can either be revocable or irrevocable.
A revocable trust is created during the lifetime of the trust maker, this kind of trust can be altered, modified, revoked, or changed. For example, if you put some or all of your property in revocable trust you would be able to get the property back any time you want, change the beneficiaries, and you can also control how the property will be managed while in the trust.
When is comes to an irrevocable trust, once you transfer some or all of your property, you are giving up all your rights to that property. This is because with an irrevocable trust you have no right to change, terminate, modify, or revoke the trust. You might be wondering why anyone would ever use an irrevocable trusts; the most common reason these trusts are used is to satisfy property settlements in the case of a divorce or some other court order. Many people that earn high incomes, such as celebrities, will use these types of trusts to protect their properties from the claims of creditors. High-income individuals are more susceptible to high monetary judgments in lawsuits, so an irrevocable trust protects their property from the various claims.
Be sure to check back as we discuss other types of trusts in the future. If you are looking to hire an attorney to handle your trust, please give us a call at 414-259-9300. We have a team of attorney’s that specialize in trusts in Wauwatosa, WI and surrounding Wisconsin areas including Milwaukee, Waukesha, Ozaukee, Washington, Racine and Kenosha Counties.