Wills and trusts are an essential part of estate planning in Indiana. While trusts designate how one’s assets will be distributed, wills are also necessary as these documents ensure that an estate plan will be carried out according to your wishes after your passing. Both work together to ensure that an estate will bypass probate.
What is an intervivos trust?
Intervivos trusts are commonly called living trusts and can be revocable or irrevocable. They are created when you are still alive to name your beneficiaries and the included property and assets to avoid probate. Testamentary trusts are detailed in your will and are created upon your death. These are irrevocable and are sometimes subject to probate. Which type you choose when establishing a trust depends on your needs.
Critical differences between intervivos and testamentary trusts
The main reason for creating intervivos trusts is to protect your assets from creditors. You can also use or spend down the trust assets while you are still alive.
Testamentary trusts have a specific purpose in mind, such as creating income for your spouse or providing support for minor children. These trusts must go through probate to ensure their validity.
Which trust is right for my estate?
When beginning estate planning, the types of available trusts can become confusing as there are many different ones from which to choose. Most individuals select a variety of trusts for their estate plan; yours can contain both intervivos and testamentary trusts according to your needs and wishes.
An important point to remember when beginning this process is that there is no single correct process. Carefully assessing your needs and those of your beneficiaries is essential. Know that the different types of revocable trusts will allow you to update your estate as needs change.