6.6.4 Living trusts: enable you to put your assets in a trust while still alive. You can wear all the hats: grantor, trustee, and beneficiary; or have someone else be trustee and have other beneficiaries. You could even plan for incapacity in a Living Trust.
6.6.5 Revocable trusts: are simply ones that can be changed, or even terminated, at any time by the grantor. Though most living trusts are revocable, a living trust and a revocable trust are not synonymous.
6.6.6 Irrevocable trusts: cannot be changed or terminated before the time specified in the trust, but loss of flexibility may be offset by savings in taxes.
6.6.7 Spendthrift trusts: can be set up tor people whom the grantor believes wouldn’t be able to manage their own affairs – an extravagant relative or someone who is mentally incompetent. They may also be useful for beneficiaries who need protection from creditors.
6.6.8 Support trusts: direct the trustee to spend only as much income and principal as may be needed for the education and support of the beneficiary.
6.6.9 Testamentary trusts: are set up in wills.
66.10 Totten trusts: are not really trusts. They are a kind of bank account that passes to a beneficiary immediately upon death.
6.6.1 Wealth trusts: are tax-saving trusts that benefit several generations of your descendants.
6.7 A WILL OR TRUST?
When is it appropriate to use a trust rather than, or in addition to a will?
A trust does what a will does; it leaves property to people you have named as beneficiaries. Unlike a will however, property in a trust arrangement does not have to go through probate. That gives you savings in inheritance tax. A major difference between a will and a trust, (especially a living trust) is that a living trust is created while you are still alive while a will takes effect only upon the death of the testator.
A trust is an abstract creation; technically, you own nothing while the trust owns everything. However, that is not a cause for concern at all as you can still exercise complete control over the property. As the settler (along with one of the beneficiaries), you can sell assets, acquire new assets and even derive income from the trust. A trust is more confidential than a will. At death, your property would be distributed according to the terms of the Trust Deed. With a trust, there are no delays, probate, publicity and expense typical of a will.
Determining whether a trust or a will is more beneficial to you will depend on your circumstance. If your estate is small, it may be cost effective to opt for a will which is relatively inexpensive. The suitable option discussed with a professional.
Preparing a living trust necessitates the services of a professional who is very experienced in estate planning. Please choose a professional who is versed in estate planning.
6.8 ESTATE PLANNING
Now, take a look at yourself objectively! You have spent substantial time planning and achieving a decent living. Years have come and gone and you have achieved some success. Your focus now needs to shift to ensuring that your loved ones are cared for after you are gone. That is what Estate Planning is all about.
6.9 TRUST COMPANIES
The wealth transfer process can be stress-free and at the least cost when you firm it out to professional companies. Estate planning is the business of Trust Companies. In Nigeria, we have companies such as Union Trustees, Stanbic IBTC Trustees and First Trustees who will be delighted to take the stress of planning your estate off you.
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