In addition to the basic estate documents, estate planners use a variety of documents to avoid probate, protect beneficiaries, protect assets, minimize tax obligations and plan for other special needs.  Some of those tools are: Trust, Revocable Trusts, Irrevocable Trusts, Name on Death Beneficiary Designation, Lady Bird Deeds, Special Needs Trusts, Creditor Protection Trusts, Joint Ownership Agreements.

Trusts in Estate Planning are, in the simplest terms, an arrangement where the owner of property gives that property to a Trustee with instructions on how that property is to be managed including who is to benefit from the property. 

Revocable Living Trusts are a tool that allows a person to own and manage property during their lifetime and then name the next trustee and gives them instructions on how to manage the property.  Revocable trusts are used to maximize the flexibility of the original owner.  They are great for avoiding probate, managing assets for a person with cognitive decline, and managing assets for beneficiaries that would benefit from having their inheritance managed by a trustee.  The downsides are greater upfront costs and more administrative responsibilities during life.

Irrevocable Trusts are a Trust where the original owner of the property gives up all control to the trustee. They are used when a Revocable Trust stops being revocable, for tax planning purposes, and creditor protection.

Name on Death Beneficiary Designations are an arrangement offered, usually by an institution that is managing an asset or a policy, that lets that manager know whom they are to transfer the asset to after death.  Familiar users of Name on Death Beneficiary Designations are life insurance companies. Other institutions such as banks, brokerages, and retirement asset administrators also tend to offer them.  They are great for someone that wants their beneficiary to inherit the asset without constraints.  They only apply to the asset managed by the institution and don’t work well for children, others that need their assets managed for them, and for large number beneficiaries.

Ladybird Deeds are like a Name on Death Beneficiary Designation but for real estate.  A deed is recorded now that transfers real estate now but reserves the right of the transferor to control the property during his or her lifetime.  They are great for those that have a limited number of beneficiaries, that don’t need the property to be managed by a Trustee and who don’t intend to move in the foreseeable future.

Special Needs Trusts are Trusts set up with the purpose of providing protection for beneficiaries that aren’t going to be managing their own assets usually because doing so may impact their ability to receive government benefits such as Medicaid.  They are helpful to parents that want to supplement the lives of their special need child without having that child spend all of their inheritance on their care or losing their benefits.

Creditor Protection Trusts are Trusts where the beneficiary gets the benefit of the assets managed by the Trust but cannot be taken by creditors.  They are helpful where a beneficiary will not use the assets as the owner would want them to be used.  The downside is that the beneficiary has very little control of the assets to the point where the Trustee typically can refuse any distributions.

Joint Ownership is anytime more that one person or entity owns the same property.  Some examples are joint ownership such as a husband and wife, co-ownership where co-owners each own a portion, stock or membership, current owner, and future owner. For assets that can be titled, sometimes the title can spell out how the asset will pass on death.  Sometimes for titled assets and always for non-titled assets, an agreement that spells out the way the property will be handled after death is an important part of estate planning.