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Types of trusts and their uses

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A will is an important part of any estate plan — but it doesn't have to be the focal point. Trusts have become increasingly popular vehicles for preserving wealth and passing it on to the next generation as people increasingly try to avoid the complicated (and expensive) process of probate.

There are a lot of different kinds of trusts out there, each suitable for different goals. If you're just starting to consider the usefulness of a trust as part of your estate plans, it may help to have a passing familiarity with the following kinds.

Revocable trusts

Revocable trusts are pretty much exactly what they sound like: You retain control over them during your lifetime and can end them at any point. Their chief advantage is their flexibility — and the fact that the assets inside them are distributed according to the trust's terms without going through probate.


The creation of an estate plan or last will is an important protection for both you and the people you love. Far too many people make the preventable mistake of delaying the creation of their estate plan indefinitely, which may mean that they died intestate or without a last will.

There are many different reasons why creating a last will sooner rather than later will benefit you, but there are three benefits that are nearly universal reasons to start estate planning now.

Your legacy may be how people remember you

You want to make a profound and lasting impression on people while still alive. Your legacy could include your professional, artistic or academic works, your family, or local community contributions, such as volunteerism or donating to charity.


Estate planning is never on anybody's list of “favorite things to do,” but it's really important to have those plans in place — just in case something happens. However, choosing the right people to manage those responsibilities can be complicated, especially if you don't know what each person is supposed to do.

Here's what each person involved in your estate will need to do:

The executor

Your executor is the person who acts as your personal representative. Their job is to secure your assets, pay your debts and follow the distribution guidelines of your will. While that sounds fairly simple, it can sometimes put them into conflict with family members (especially if they aren't happy about the will). A good executor is someone who lives close enough to be practical and well-trusted.


Medical debt is a serious problem for many people — even those who have insurance and are relatively stable, financially. A 2016 survey found that more than one-quarter of people in the United States have experienced problems paying a medical bill.

Here are some of the most jaw-dropping statistics about medical debts in the modern era:

  • As far back as 2007, medical problems and medical bills were contributing factors to two-thirds of all consumer bankruptcies — a figure that had increased dramatically since just 2001.
  • Three-fourths of debtors who filed bankruptcy over medical debt have insurance. However, gaps in coverage, high deductibles, pricey medications, and uncovered procedures and tests leave them exposed to financial liabilities they can't cover.
  • Many of the people who file bankruptcy over medical debt are middle-aged or approaching middle-age (with an average age of almost 45). About three-fifths have college degrees.
  • Slightly more than half — 54% — of consumers who have medical debt on their credit reports have no other debts listed. Yet, they cannot fully pay their medical bills.
  • A steady income is no guarantee that you can pay a surprise medical bill. The average monthly income of someone who files bankruptcy over their medical bills is $2,586 per month.
  • The struggle to afford necessary (and potentially life-saving) medical tests, procedures and medication can lead to other financial problems. Among consumers with unpaid medical bills, 29% say that their struggle with medical debt led to problems paying other bills.

Medical debt can start a snowball of debt rolling and disrupt your ability to care for yourself or your family. Many people are merely one serious accident or major illness away from financial distress. Find out more about how Chapter 7 bankruptcy may relieve your problems.

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