The Different Types of Trusts in Utah

When creating an estate plan in Utah, you have several types of trusts available to suit different goals. A trust is a legal arrangement that holds and manages property. As the grantor, the person who creates the trust, you decide which assets to place in the trust and designate the beneficiaries who will receive those assets after your passing. You also appoint a successor trustee to manage the trust and its property on your behalf. There are many different types of trusts you can include in your estate plan. Below, our Utah estate planning attorney explains the options and how each can be used to meet your planning needs.

Revocable Trusts 

As its name suggests, a revocable trust is one that you revoke, or terminate, during your lifetime. You can manage the property within the trust throughout your life and sell it, gift it, and fund the trust with additional property.

In exchange for the flexible nature of a revocable trust, the protection it provides during your life is limited. For example, creditors may still be able to seize the property in the trust if you owe them a debt. Likewise, the property in the trust may also be at risk if you are ever sued or a judgment is issued against you. After your death, a revocable trust will become irrevocable.

Irrevocable Trusts

Irrevocable trusts are fundamentally different from revocable trusts. Once you establish and fund an irrevocable trust, its terms are generally fixed and cannot be changed or revoked, providing legal and financial protections. Assets placed in an irrevocable trust are typically shielded from creditors, lawsuits, and, in many cases, certain court claims. Although irrevocable trusts limit your control over the assets, they can be beneficial in specific situations. For example, they can be used to provide for a minor child, an adult with special needs, or an elderly relative, ensuring that the assets are managed responsibly for their benefit. They are also commonly used in tax planning, such as with life insurance trusts that help reduce estate taxes by removing assets from your taxable estate. By carefully structuring an irrevocable trust, you can achieve long-term protection and financial planning goals that are not possible with a revocable trust.

Charitable Trusts 

There are a number of different types of charitable trusts you can establish. You can create a charitable remainder trust, allowing a beneficiary to receive an income stream for a certain period of time while the remaining assets are transferred to a public charity when the trust is terminated.  You can also create a  charitable lead trust, which provides a charity with an income stream for a certain period of time and when the trust is terminated, the remaining property is then transferred to the trustor’s beneficiaries.

Special Needs Trust 

Someone with disabilities may not be able to manage their own affairs. Leaving them an inheritance directly may also interfere with certain government benefits they are receiving. A special needs trust can protect their benefits and ensure funds or other property is left for them.

Our Estate Planning Attorney in Utah Can Create Your Trusts 

It is true that establishing a trust can offer you and your family a great deal of protection. At AGS Law, our Utah estate planning attorney can ensure yours is executed properly so it is enforceable and will provide the protection you intended. Call us now at 801-477-6144 or contact us online to request a consultation.

Source:

le.utah.gov/xcode/Title75/Chapter7/C75-7-P6_1800010118000101.pdf