Some people in North Dakota might only associate estate planning with writing a will. While a basic will that names who should inherit a person’s assets may be the cornerstone of many estate plans, there are wills that serve a somewhat different purpose. In addition, a trust can be a fundamental part of an estate plan, and in some cases, it may largely supplant the will.
Trusts can be excellent tools for protecting assets in a variety of situations. You can use a trust to protect assets for minor children or to specify the circumstances in which beneficiaries receive distributions from the trust. Broadly speaking, trusts are either revocable or irrevocable, meaning that the former can be changed by the creator while the latter cannot.
Types of trusts
With a special needs trust, you can provide for someone who has special needs while protecting their access to government support. A qualified terminal interest trust lets you name who will receive assets that pass to your spouse after your spouse’s death. If you are married to a noncitizen, placing assets in a qualified domestic trust ensures that they get the marital deduction. There are a number of other types of trusts useful in estate planning as well.
Types of wills
A pour-over will places assets not already in a trust into one on the death of the will’s creator. A will can also specify the conditions that would create a contingent trust. You may reduce estate tax by creating a testamentary bypass trust with your will.
It is important to know the different types of documents because otherwise you may be unaware of the solutions to estate planning problems you have encountered. This knowledge can help you better plan for yourself and your loved ones.