While there are some forms of trust that everyone is familiar with, such as revocable and irrevocable trusts, spendthrift trusts, and asset protection type trusts, there are some others that are not so well known. Here are four types of trusts that you may not know about and one that many of you may be using and not even be aware of!
- SPECIAL NEEDS TRUST: This trust should be set up by parents or guardians of those with special needs who depend on government benefits or by the disabled person who expects to come into money later as the result of an accident or inheritance. In the case of the person who sets up this trust for themselves, they must name a trustee to handle the money for them. While gifts and inheritances can suspend benefits, the law provides that monies from this trust are legal. The recipient cannot control the frequency of distributions, nor can they change the trust. This trust can provide things for the beneficiary that can’t be provided on the normal income benefit. This trust can be used to pay for a wide range of personal needs, from education to medical needs and spending money.
- TOTTEN TRUST: Many people use this method of asset protection and don’t recognize it as a trust. Simply explained, this trust is used to protect money and investments deposited at a bank or credit union from probate. This works as a savings account in the name of the depositor until their death, at which time the person or organization listed as beneficiary is given access to the gift. This is a very simple method, as it is often called a “poor man’s trust” and easy to accomplish. When you set up this account, specify it as “In trust for” or “Payable on death to”.
- TAX BYPASS: This is a way to protect assets that may be taxed when handed down to children. Those with large estates may want to consider putting them in a trust to avoid the inheritance taxes which could be levied on the heirs. This trust allows spouses to assume rights, but when the spouse passes, it helps the next generation in protecting the assets.
- CHARITABLE TRUST: While many people can benefit from this trust, the most advantage goes to those with large estates or those whose family may not follow up on the wishes of the deceased to donate to charity. While it does help shelter some of the money from inheritance taxes, it also keeps the wishes of the trust maker intact.
If you have questions about whether a trust may benefit you or your family, our office is here to help answer them. We can help establish your trust, answer your estate concerns, and put a plan in place to protect your assets and your family for generations to come. Mestayer Law Firm provides civil litigation for clients throughout the Gulf Coast area including Pascagoula, Biloxi, and Gulfport. If you are making future plans for your estate, then contact us today and let us help take care of every detail of your finances. Call us today at 228-762-1193 or visit www.pascagoulalaw.com. We are your legal experts! You can also visit our office located at 2128 Ingalls Ave. in Pascagoula, Mississippi. We look forward to talking with you!
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This article does not create an attorney-client relationship. I am licensed to practice law in Mississippi and have based the information presented on US laws. This article is legal information and is for entertainment and informational purposes only and should not be seen as legal advice. You should consult with an attorney before you rely on this information. Any information provided in this blog is accurate and true to the best of our knowledge, but that there may be omissions, errors, or mistakes.