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3 Trusts To Consider When Estate Planning

living trust & estate planning

Many people think of their Will as the core of their estate plan, but Wills can be contested and may be subject to a lengthy probate process. Using a trust can circumvent many wealth transfer issues and help relieve much stress for you and your heirs.

A trust can add a layer of protection for your family, loved ones, and legacy once you’re gone.

What is a Trust?

A trust is a legal document that establishes a “holding basket” for your assets including money, securities, and physical property.

A trust can potentially protect your assets from taxes, creditors, or lawsuits and provide an income stream for your family. However, it is important to choose the right type of trust for your needs.

Different Types of Trusts

Revocable Trust

A revocable trust (also known as a “living trust”) allows you as the trust creator (grantor) to change or dissolve the trust at any point during your lifetime. You are able to change the requirements of wealth transfer, add or remove beneficiaries (i.e. in the event of a divorce or the addition of family members), and remove assets at any time.

A revocable trust can help you avoid probate. However, on your death the assets are still considered to be your personal property (as you had control of them) and may be subject to creditors and taxes.

Irrevocable Trust

Once you establish an irrevocable trust it cannot be changed or terminated. It gives you the highest level of protection from creditors, lawsuits and taxes as the assets are not considered to be your personal property. Using an irrevocable trust allows you to avoid probate.

Once assets are committed to an irrevocable trust, you as the grantor have no access to them. They are no longer your personal property. Management of the trust is overseen by a trustee appointed by you, which may be a Trust Company or a properly licensed individual.

Testamentary Trust

A testamentary trust is typically not funded until your passing. It is specified in your Will and goes into effect on your death. It is usually for the provision of minor children or beneficiaries with special needs. This type of trust can be subject to probate and taxes as your assets may not have been transferred while you are living.

Benefits of Using a Trust in Estate Planning

  • Pass on your assets to your heirs without going through probate (except Testamentary Trust).
  • Specify assets to be used for the care of a special needs dependent.
  • Establish requirements for your beneficiaries to receive their inheritance.
  • Preserve assets for the care of minor children should you pass before they are of age.
  • Potentially reduce estate and gift taxes (Irrevocable Trust only).
  • Protect assets from creditors and lawsuits (Irrevocable Trust only).

Which Type of Trust is Best for You?

Including a trust as part of your estate plan can contribute greatly to avoiding probate, ensuring your wealth transfer directions are fulfilled, and protecting your assets from creditors and taxes. However, it is important to establish the type of trust that best suits your needs and for this, a professional estate planner or trust lawyer should be consulted.

How Bloom Can Help You With Your Estate Planning

For close to 40 years Bloom Investment Counsel has been providing actively managed customized portfolios for our clients’ assets including trusts. At Bloom, we are pleased to partner with your other trusted professionals such as estate planners to build a customized portfolio for the type of trust best suited to your needs.

Are you looking for a personal investment management service that can help you generate income, if needed, and growth? Let’s Talk. Call us at +1-416-861-9941 or email us at

This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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