In planning long-term financial goals, including estate planning and end-of-life issues, people may be interested in all the benefits of trusts. According to MichiganLegalAid.org, a person, known as a grantor, who chooses to create a trust designates another person or entity, the trustee, to hold the title of an asset. The type of trust will affect who can be the trustee, and also who may receive the benefits of the trust. It also determines control.
If the grantor opts for a revocable trust, he or she has the ability to set and revoke the terms at any time during his or her life. Grantors may name themselves the trustee and the beneficiary of a revocable trust. This allows people to continue to use or benefit from their property while they are alive, but at death, the person named as successor trustee distributes the property remaining in the trust to the successor beneficiaries the grantor named. Many people set up revocable trusts to prevent their assets from going through probate.
Fox Business explains that a person who sets up an irrevocable trust cannot be the trustee, and cannot change the document without the permission of the trustee and the beneficiaries. However, grantors can dictate how the assets will be allocated after their death. For example, a parent could include instructions for the trustee to designate some money for a child’s college education, and to provide a monthly allowance, but to hold the balance until the child reaches the age of 25. So, the grantor is giving up control before death for greater control afterward.