You have a lot of terms to sort through if you’re thinking about creating a trust as part of your estate plan. You can use revocable trusts, irrevocable trusts, special needs trusts and much more. One term you may have heard is an express trust. What is this and when would you use it?
An express trust is a consciously created trust. Essentially, any trust that you decide to use with your estate plan, no matter what it does specifically, is an express trust. You created it intentionally and with a goal in mind.
Why is there a distinction? There are cases in which a court order can create a trust. This is out of your control. It is less common, but it needs to be noted that not all trusts are created intentionally by those who puts their assets into them.
In your case, though, an express trust gives you a lot of different options. A few include:
- Special needs trusts to assist heirs who need financial benefits after you pass away
- Educational trusts to help heirs cover the rising costs of tuition
- Charitable trusts to move money to your favorite charity in a controlled manner
- Spendthrift trusts to keep heirs from spending their inheritance too quickly
- Age-based trusts to give money to heirs only after they reach a certain age, especially if they are minors when you pass away
These are not all of your options, but they do give you a solid foundation to start. Make sure you know exactly what steps to take and how to get the trust set up properly.