Different Types Of Trusts
Introduction to Trusts
Trusts are legal arrangements that allow a person (the trustee) to hold assets on behalf of another person or entity (the beneficiary). Trusts are commonly used in estate planning to manage and distribute assets according to the wishes of the trust creator (also known as the settlor).
Types of Trusts
1. Testamentary Trusts
Testamentary trusts are created through a person’s will and only come into effect upon the death of the individual. These trusts can be used to provide ongoing financial support for beneficiaries, protect assets, and minimise tax obligations.
2. Living Trusts
Living trusts, also known as inter vivos trusts, are established during the lifetime of the trust creator. These trusts can be revocable or irrevocable and are commonly used for estate planning purposes to avoid probate, maintain privacy, and ensure efficient asset distribution.
3. Discretionary Trusts
Discretionary trusts provide the trustee with discretion over how assets are distributed among beneficiaries. This type of trust allows for flexibility in managing assets and can be useful in protecting assets from creditors or ensuring financial support for vulnerable beneficiaries.
Frequently Asked Questions
1. How do I choose the right type of trust for my estate planning needs?
Choosing the right type of trust depends on various factors such as your specific goals, financial situation, and preferences. It is advisable to seek professional legal advice from experienced estate planning lawyers like Wright Street Lawyers to determine the most suitable trust structure for your individual circumstances.
2. Can a trust be modified or revoked after it has been established?
The ability to modify or revoke a trust depends on the type of trust established. Revocable trusts allow the trust creator to make changes or terminate the trust during their lifetime, whereas irrevocable trusts typically cannot be modified once established. Consulting with a knowledgeable trust attorney can help you understand your options.
3. What are the tax implications of setting up a trust?
Trusts can have complex tax implications, including income tax, capital gains tax, and stamp duty considerations. Working with experienced tax and estate planning professionals at Wright Street Lawyers can help you navigate the tax implications of setting up and managing a trust effectively.
Contact Wright Street Lawyers for Trust Planning
If you are considering setting up a trust for estate planning, asset protection, or other purposes, contact Wright Street Lawyers in Adelaide, South Australia. Our team of experienced legal professionals specialises in family law, estate planning, probate, and criminal defense, and can provide client-focused guidance tailored to your specific needs.
