What is a Trust?
A trust is created by an individual during their lifetime or following their death. A trust operates in a manner to protect assets from various factors. When assets are placed in a trust, the immovable and movable property belong to the trust and not to the trustees. There will be rules and instructions that will govern the maintenance of the trust. There is a fiduciary duty between the relationship of an individual for the benefit of another. There are revocable and irrevocable trusts that can be created together with other variations.
What is a Revocable Trust?
A revocable trust is created in a manner that allows it to be changed and modified. It can also be revoked. It is sometimes referred to a living trust. These type of trust prevent situations such as probates. The assets present in the revocable trust will be subject to the creditors access, usually the revocable trust can convert to an irrevocable trust upon the death of the trustmaker.
What is an Irrevocable Trust?
An irrevocable trust is almost the polar opposite of a revocable trust, in this situation the trust cannot be modified or changed. Once the property is transferred into an irrevocable trust, the property cannot be taken out of the trust. These type of trusts are beneficial for large estates. There are still many factors to be taken into consideration therefore it is a matter that requires a lot of careful thought and contemplation.
What is an Asset Protection Trust?
An asset protection trust is created for the purpose of protecting your assets from future creditors. This type of trust is a common feature in the America. This trust is structured as irrevocable for several years. The trustmaker will acquire control after a period of time and have complete access to his assets.
If a trust formation is a matter of consideration in your mind, you need to consult with a reputable attorney that will ensure that you are properly informed on all the important aspects of its creation.