When Kansas residents think of the term, “estate planning,” the first thing that likely jumps to mind is the creation of last wills and testaments. Because wills are the most commonly used tool for planning how to distribute one’s assets after death, it is logical that they are also the most widely known. There is more to estate planning than wills, however, and one of the tools that are available to Kansans are trusts.
What is a trust? A trust is simply a way of grouping assets together for a certain purpose, and giving control of those assets to a person or institution, known as a “trustee.”
The trustee’s job is to administer the trust’s assets with the goal of the trust in mind. Many times, this means preserving and growing the assets so that they can be distributed to the beneficiary of the trust.
There are two general “flavors” of trusts: revocable and irrevocable. The main difference between these types of trusts is exactly what it sounds like. That is, a revocable trust can be changed or terminate (revoked) at any time by the maker of the trust, while irrevocable trusts generally cannot.
There are however, some subtler differences as well. For example, while both types of trust will help the assets contained therein to avoid probate. Revocable trust assets are usually reachable by creditors of the trust maker. Because he or she still has control of the assets, the creator of a revocable trust is not generally protecting them from those to whom he or she owes money. Irrevocable trusts, on the other hand, usually will protect assets in them from creditors, as the creator no longer has control of them.
There are many other uses for trusts, just as there are many other estate-planning tools at the disposal of Kansas residents. These tools all help a person plan for the future, whether his or her own, or that of a family. People with questions on how to use these tools may wish to consider consulting an experienced trust and probate administration attorney.