Why You Need A Trust—Even If You Aren't Rich
When you hear the words “trust fund,” you might conjure up images of stately mansions and mega yachts. However, a trust fund—or trust—is actually a great estate planning tool for people with a wide range of income levels, who want to accomplish a specific purpose with their money and other assets.
Simply put, a trust is a legal vehicle used to transfer your assets in the event of your incapacity or death. A trust is especially useful for parents of minor children, along with those who wish to spare their loved ones the hassle of going through the court process known as probate.
And why would you want to keep your family out of court?
Keep Your Family Out Of Court
Depending on your estate, probate can take months, or even years, to complete. Plus, probate can be expensive. In fact, once all of your debts, taxes and court fees have been paid, there might be nothing left for your loved ones to inherit. And if there are any assets left, your family will likely have to pay hefty attorney’s fees and court costs to claim them.
Or perhaps you’d like to keep the details of the assets you are leaving your loved ones private. When you leave assets via a will, the will must first go through probate, which makes your estate a matter of public record. By contrast, with a trust, your estate remains private, and your assets can be distributed to your family immediately upon your death, without the need for any court intervention.
Hold Inheritance For Minors
If you have minor children, you can create a trust in order to hold your assets for them until they reach adulthood, since minors cannot inherit assets directly. And you can name someone you trust as trustee to manage those assets for your children until they come of age.
Provide For Incapacity
You can even establish a trust for yourself to be used in the event you become incapacitated by accident or illness and become unable to manage your own finances. The trust assets would be managed by a trustee of your choice and used to provide for your care, which prevents the need for your family to go to court to have a guardian appointed.
Ideal For Blended Families
Trusts are also a wonderful tool for blended families. If you are in a second (or more) marriage and have children from a previous relationship, there is an inherent risk of conflict between your spouse and children, since your children and spouse will likely have different interests in regards to inheriting your assets. However, you can use a trust to ensure that both your spouse and children are able to receive the assets you want them to inherit according to your wishes.
We Can Help
As you can see, there are many reasons to create a trust, but being rich isn’t necessarily one of them. You can learn more about how a trust can benefit your family by scheduling a Family Wealth Planning Session™, where we can identify the planning strategies that are best for your unique situation.
This article is a service of CONNORS LAW, a Personal Family Lawyer® firm. We don’t 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 Family Wealth 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 calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
