The 5 Most Common Types of Trusts

 Posted on January 23, 2025 in Estate Planning

A carefully written estate plan is essential for protecting your assets and ensuring your loved ones are cared for after your passing. While many people are familiar with wills, a trust can offer additional benefits, such as avoiding probate, reducing taxes, and providing specific instructions for how your assets are distributed.

Below are the five most common types of trusts that the average person may use as part of their estate plan. At Colbert Law Group PLLC, our Texas estate planning attorney can help you set up one of these or any other trust that protects your wishes.

Revocable Living Trust

A revocable living trust is one of the most popular options for estate planning. This type of trust allows you to maintain control of your assets during your lifetime, and you can modify or revoke it at any time. Upon your passing, the assets in the trust are distributed according to your instructions, without the need for probate. This ensures a faster and more private process for your heirs.

Irrevocable Trust

Unlike a revocable trust, an irrevocable trust cannot be changed or canceled once it is created. This type of trust is often used to protect assets from creditors, lawsuits, or estate taxes. Since the trust’s assets are no longer considered part of your estate, they are generally not subject to estate taxes, which can save significant money for your beneficiaries.

Testamentary Trust

A testamentary trust is created through a will and only goes into effect after your passing. It is often used to provide for minor children or dependents who may need financial support. The trust allows you to set specific terms for how and when the assets will be distributed, such as limiting access until the beneficiaries reach a certain age.

Special Needs Trust

A special needs trust is designed to provide financial support for a loved one with a disability without jeopardizing their eligibility for government benefits, such as Supplemental Security Income (SSI) or Medicaid. This type of trust ensures that the funds are used to enhance the quality of life for the beneficiary while preserving their access to essential support programs.

Charitable Trust

A charitable trust is a way to support a cause you care about while also receiving potential tax benefits. Assets in a charitable trust are donated to a charity or nonprofit organization, either during your lifetime or after your passing depending on your wishes. This type of trust can also provide income to your heirs for a set period before the remainder goes to the charity.

Contact a Denton County, TX Wills and Trusts Lawyer Today

If you are ready to explore how a trust can serve your long-term plans, contact a Flower Mound, TX estate planning attorney at Colbert Law Group PLLC. Call 972-724-3338 to schedule a consultation and learn how we can help you protect your legacy and provide for your loved ones.