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Do images of elegant homes and yachts come to mind when you hear the words "trust fund"? A trust fund - or trust - is an useful estate planning option for many individuals with a range of incomes who desire to use their money for a certain purpose. Simply explained, a trust is a vehicle for transferring assets. Trusts are particularly valuable for parents of minor children as well as people who want to avoid having to go to court in the case of their incapacity or death.
Why would you want to keep your family out of court (also known as avoiding probate)? You might prefer to keep the details of the assets you're passing to your heirs confidential. Your estate becomes a subject of public record if you leave assets in a will because it must go through probate. A trust is a private document that distributes assets after you pass without the requirement for probate, which can lock up assets in court for a substantial period. The judicial procedure might drag on longer than necessary, preventing your family from accessing your assets as promptly as they want or need them.
If you have minor children, you need to create a trust in order to leave your assets to them since minors cannot inherit directly. You should appoint a trustee to look after your children's assets. Even if your children are adults, a trust can help safeguard the assets you leave them from creditors, court judgements, divorce, and even their poor financial management practices. You can even create a trust for yourself in the event that you become incapacitated and are unable to manage your funds in the future. If you become incompetent, the trust assets are administered by a successor trustee, which eliminates the need for a court-appointed conservator. For people who are part of a blended family, trusts are also beneficial. If you've remarried and had children from a prior marriage, a by-pass trust can help you care for your current spouse while also guaranteeing that your assets transfer to your children from a previous marriage. When your surviving spouse dies, the assets under this type of trust will transfer to your children free of estate tax.
As you can see, there are a variety of reasons to establish trust, and being wealthy isn't one of them. You may discover more about how a trust can help you or your family by booking a consultation during which we can determine the best solutions for you and your family.
This article is a service of The Ambitious Legacy Firm., your Legacy Planning Attorneys. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by using the link below to schedule a call with our Client Services Director, who will be able to guide you on scheduling your Legacy Planning Session, or by emailing us at legacy@franco-lawfirm.com. Mention this article when you reach out to us to find out how to get this $750 session at no charge.
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