- Revocable Living Trust. A revocable living trust can help you leave assets to your heirs without going through the costly, time-consuming and public probate process. When you set up a revocable living trust, you can control your assets during your lifetime and determine how they will eventually be distributed to your heirs. You could, for example, have money distributed to your children or grandchildren in installments over a period of years. Plus, a properly established revocable living trust will carry out your wishes if you become incapacitated.
- Bypass Trust. If you're married, you can leave an unlimited amount of assets to your spouse, free of estate taxes and without using any of your estate tax credit. Basically, a bypass trust allows both spouses' estate tax exemptions to be preserved to the benefit of the surviving spouse and, ultimately, the children.
- Special Needs Trust. If you have a family member with a disability, you might want to think about a special needs trust. People with mental or physical disabilities can hold an unlimited amount of assets in a special needs trust (sometimes called a supplemental needs trust) without having the assets count against eligibility for certain governmental benefits, such as Supplemental Security Income (SSI), Medicaid, vocational rehabilitation and subsidized housing.
- QTIP Trust. If you're married for a second time but want to make sure your children from your first marriage are protected, you may want to think about a QTIP (Qualified Terminable Interest Property) trust. A QTIP trust enables you, as grantor, to provide for your surviving spouse and also maintain control of how the trust's assets are distributed once he or she also dies.