Trusts are very useful estate planning tools because, among other qualities, they are adaptable to many purposes. Many people set up a trust to go into effect only upon their death, like a will. But you can also set up a trust to go into effect during your life. If you do set up one of these so-called living trusts, it can survive you and remain in effect long after you are gone.
Just how long can your trust remain in effect after you are gone? The answer to that question is complicated.
The purpose of a trust
It’s common for a trust to last for 21 years. However, in general, a trust remains in effect until its purpose is fulfilled. How long your trust can remain in effect depends largely on the type and purpose of your trust.
For instance, you might have minor children and set up a trust in order to make sure they are taken care of after you are gone. In this case, you might set up your trust so that it expires when your youngest child reaches age 21. At that point, the trustee will dissolve the trust and distribute its assets to its designated beneficiaries.
Depending on your family’s situation, you might desire more control over how your trust takes care of your loved ones. For instance, with a special needs trust, you can provide for a disabled loved one for the rest of their life. When set up properly, this type of trust can maintain your loved one’s eligibility for disability benefits while also providing them with some income.
Some trusts are based not on a person’s lifespan or a deadline but rather on the fulfillment of a condition. Although this type of trust is rare and problematic, some people attach conditions to a trust, such as requiring that a loved one graduate from college or even that they get married.
Longer trusts
Some longer-lasting types including generation-skipping trusts. For instance, a grantor (the person who creates the trust) can set up a generation-skipping trust to skip over their own adult children and be distributed to their grandchildren.
Generally, most types of trusts cannot last forever. One possible exception is a charitable trust. In certain circumstances, you could set up a trust to last in perpetuity — or at least until its assets are exhausted.