In Oklahoma, four main types of trusts exist, each serving a different purpose depending on your financial goals, family situation, and long-term planning needs. Trusts are powerful legal tools in estate planning to manage and distribute assets according to a person’s wishes. Understanding the different types can help you determine which trust is best for your estate plan.
1. Revocable Living Trust
A revocable living trust is one of the most popular estate planning tools in Oklahoma. This type of trust allows the person who creates it (called the grantor) to retain full control over the trust assets during their lifetime.
Key Features:
- The grantor can change, amend, or revoke the trust at any time.
- The trust becomes active during the grantor’s lifetime.
- It helps avoid probate by transferring assets directly to named beneficiaries upon the grantor’s death.
- It provides privacy since trust assets are not subject to public court proceedings.
This trust is especially useful for individuals who want flexibility and simplicity while planning for incapacity or transferring property after death.
2. Irrevocable Trust
An irrevocable trust is a more rigid but powerful estate planning tool where the grantor gives up control over the trust and its assets, and the terms are usually unchangeable.
Key Features:
- The trust cannot be revoked or modified without the beneficiary’s consent (and sometimes court approval).
- Offers asset protection from creditors or lawsuits.
- Can reduce estate tax exposure.
- Useful for Medicaid planning and long-term care strategies.
While it limits the grantor’s control, an irrevocable trust can be an effective way to preserve wealth and qualify for government benefits.
3. Testamentary Trust
A testamentary trust is established through a will and takes effect only after the grantor’s death.
Key Features:
- It is in the will and must go through probate.
- Commonly used to provide for minor children or beneficiaries who are not ready to manage assets on their own.
- Allows the grantor to place conditions on asset distribution.
This trust type is ideal for parents of young children or individuals who want to stagger distributions over time.
4. Special Needs Trust
A special needs trust is designed to benefit an individual with a disability while preserving their eligibility for public assistance programs, such as Medicaid or Supplemental Security Income (SSI).
Key Features:
- Holds assets for the disabled person’s benefit without disqualifying them from means-tested benefits.
- Managed by a trustee who uses funds to pay for supplemental needs, such as education, therapy, travel, or personal care.
- Can be funded by the individual’s own assets (first-party trust) or by a third party (like a parent or grandparent).
This type of trust is crucial for families who wish to support a loved one with special needs without jeopardizing their access to government assistance.
Tulsa Estate Planning Attorneys
Each of the four types of trusts in Oklahoma serves a distinct purpose. Whether you’re aiming to avoid probate, protect assets, provide for a child with special needs, or plan for future medical expenses, choosing the right trust depends on your personal and financial circumstances. At Tulsa County Lawyers Group, we provide guidance that brings peace of mind. Get a free consultation from an estate planning attorney by calling 918.379.4864, or you can ask an online question by following this link.
