Have you finally decided to hang up your work boots once and for all? If so, you know that your life is going to change in many ways. In particular, your financial situation will never be the same.
As a retiree, there will come a time when you want to review your estate plan. Even if you created an estate plan in the past, it doesn't necessarily mean that it still suits your every want and need.
In fact, now that you've retired, you may find that it's time to make a few key changes to your estate plan. The sooner you do this the sooner you can feel better about the future well being of yourself, your family, and your estate as a whole.
One of the best things you can do is learn more about the many types of trusts. This is particularly true if you've overlooked the benefit of this in the past.
Here is a breakdown of five of the most common types of trusts:
1. Revocable trust
This is created during your lifetime, whenever you see fit, and can be altered or modified as many times as you wish. Also known as a living trust, you can transfer the title of property into the trust, which brings many benefits (such as the avoidance of probate) to your heirs upon your death.
2. Irrevocable trust
Similar to a revocable trust in many ways, this type can't be altered or modified in any way once its created. Furthermore, once you move property into the trust, you are not permitted to remove it.
3. Asset protection trust
Are you seeking a way to protect assets from claims by future creditors? If so, this type of trust is the best option.
4. Charitable trust
As the name suggests, this type of trust is created to benefit a particular charity upon your death. In addition to the ability to provide the charity with a gift, this can also be used to lower or entirely avoid gift and estate taxes.
5. Special needs trust
Are you concerned about the well being of a loved one with a disability? Are you worried that this person won't be able to care for him- or herself once you are gone? A special needs trust can help with this. Not only can you leave money to this person, while also stipulating how it is used, but you can also do so without disqualifying the person from receiving government benefits.
Although you have decided to stop working, a new and thrilling chapter of your life is just now beginning. Take the time to learn more about estate planning, including how each type of trust could benefit you and your family.