In Oklahoma, several types of trusts are recognized by law, and each serves a different purpose depending on your goals, family structure, and financial situation. When it comes to protecting your assets and ensuring your loved ones are cared for after your passing, a well-crafted trust can be one of the most effective estate planning tools available.
What Is a Trust?
A trust is a legal arrangement where one person (the grantor) places property into the care of another (the trustee) to manage for the benefit of a third party (the beneficiary). Trusts can hold real estate, bank accounts and business interests, as well as other valuable assets. In Oklahoma, trusts fall under the Oklahoma Trust Act and can meet a wide range of personal and financial objectives.
Revocable Living Trusts
The most common trust used in Oklahoma estate planning is the revocable living trust. This type of trust allows you to maintain full control over your assets during your lifetime and easily amend or revoke the trust at any time. Upon your death, your successor trustee takes over and distributes your assets according to your instructions—without going through probate.
Irrevocable Trusts
Unlike revocable trusts, an irrevocable trust is not easily changeable. However, they offer powerful advantages when used correctly. These trusts can:
- Protect assets from creditors
- Shelter assets from Medicaid spend-down rules
- Provide long-term support for disabled beneficiaries
Common examples include irrevocable life insurance trusts (ILITs) and Medicaid asset protection trusts.
Testamentary Trusts
A testamentary trust is createable through your will and only takes effect after your death. This type of trust is often manages inheritances for minor children or to ensure gradual distribution of assets over time. While testamentary trusts do not avoid probate, they allow you to exercise long-term control over how and when people use your assets.
Special Needs Trusts
If you have a child or loved one with a disability, a special needs trust ensures they can receive an inheritance without jeopardizing eligibility for government benefits like SSI or Medicaid. These trusts comply with federal and state laws, and they must have a trustee familiar with public benefits rules.
Charitable Trusts
Oklahomans who wish to leave a legacy may consider setting up a charitable remainder trust or charitable lead trust. These types of trusts allow you to donate to a charity while potentially reducing your tax burden and providing income to yourself or your heirs during your lifetime.
Spendthrift Trusts
A spendthrift trust restricts a beneficiary’s access to trust assets and protects the trust from being seized by creditors or squandered by the beneficiary. These are useful when a beneficiary has a history of financial irresponsibility or is part of court litigation.
Wagoner Estate Planning Attorneys
We help individuals and families create custom trust-based plans that preserve wealth, protect loved ones, and avoid unnecessary court involvement. No matter which of the types of trusts you need, we’re here to help. Call our team of estate planning attorneys at Wagoner Attorneys at 918-283-7394 for a free consultation. Or you can follow this link to ask a free online legal question.
