Different types of trusts include revocable/irrevocable trusts, asset protection trusts, charitable trusts and constructive trusts, says FindLaw. Trusts can be created while the trust maker is alive and used after his death. A trust can also be set up by a will after the individual has passed.Continue Reading
A revocable trust is one that can be altered or nullified during the trust maker's lifetime, notes FindLaw. This type of trust allows the maker to add a property title to the trust, name himself as the trustee and remove the title from the trust if he so chooses. The main difference between a revocable trust and an irrevocable one is that the maker isn't allow to alter the terms of an irrevocable trust.
An asset protection trust safeguards an individual's assets from creditor claims and is usually used outside of the United States. An individual can establish this type of trust so that any assets that aren't distributed revert back to the trust maker once the trust has ended as long as there is no risk of creditor claims, says FindLaw.
Charitable trusts are set up so that assets can be transferred to the general public or a charity. A charity trust can be used to avoid or lower estate and gift taxes, and can offer the trust maker benefits as well, notes FindLaw.Learn more about Personal Banking