A trust is a legal arrangement in which one person, called a “grantor” or “settlor,” transfers ownership of property to another person, called a “trustee,” to hold and manage for the benefit of a third person, called a beneficiary. Trusts are often created in Ohio to manage and protect assets, reduce taxes, and provide for the distribution of property after the trustor’s death. There are several different types of trusts, each with its own specific purpose and characteristics.

6 common types of trusts in Ohio:

  1. Revocable trusts: A revocable trust, also known as a living trust, can be amended or revoked by the trustor at any time during their lifetime. This type of trust is often used to avoid probate, a legal process that occurs after a person’s death to distribute their assets according to their will or state laws.
  2. Irrevocable trusts: An irrevocable trust cannot be amended or revoked by the trustor once it has been created. This type of trust is often used to transfer assets out of the trustor’s name in order to reduce taxes or protect the assets from creditors.
  3. Testamentary trusts: A testamentary trust is created in a person’s will and becomes effective upon their death. This type of trust is often used to provide for minor children or other beneficiaries who are not capable of managing their own finances.
  4. Charitable trusts: A charitable trust is a type of irrevocable trust that is established for the benefit of a charitable organization. This type of trust is often used to make charitable donations while also receiving tax benefits.
  5. Special needs trusts: A special needs trust is a type of trust that is specifically designed to provide financial support for a beneficiary with disabilities, without affecting their eligibility for government benefits.
  6. Spendthrift trusts: A spendthrift trust is a type of trust that is designed to protect the assets of the beneficiary from creditors or their own reckless spending. The trustee is responsible for managing and distributing the assets in the trust according to the terms of the trust agreement.

Trusts are an important part of Estate Planning.

Trusts can be an important tool for managing and protecting assets, reducing taxes, and providing for the distribution of property. It is important to carefully consider the specific needs and goals of the grantor and beneficiaries when selecting the type of trust that is right for them. Trusts commonly serve as an important part of any individual’s estate plan. Please call Brenden Kelley Law at 216-644-3359 so that we can assist you.

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