Contrary to popular belief, the requirement for a trust is not tied directly to your level of wealth, although upscale individuals are typically more predisposed to developing a trust, or multiple trusts, for a variety of reasons. The requirement to develop a trust is more generational, based on the simple fact that life has actually simply gotten more complex.
So here are 7 non-tax reasons to establish a trust:
1. Preventing probate procedures so that your beneficiaries can quickly transfer assets of a decedent with privacy and at a reduced cost.
2. Securing heirs from diminishing their inheritance by staggering circulations over a number of years or upon the accomplishment of specific milestones, such as finishing from college.
3. Attending to handicapped recipients, and recipients with compound abuse concerns. A trust can enable a disabled recipient to keep their eligibility for federal government advantages, and can avoid a recipient with compound abuse problems from using their inheritance to fuel their addiction.
4. Control how your possessions will be passed down through more youthful generations by guaranteeing your estate is given through your family and not to your in-laws or enduring spouse’s new partner.
5. Lender security for your successors from their lenders, or ex-spouses in the event of a divorce.
6. Debt consolidation of possessions during your lifetime, which enables effective management in case of a disability and upon your death.
7. Planning for a mixed family, when you are in a 2nd marriage and have your children, step-children, and perhaps, our A trust can make sure that your partner which all of your children will be taken care of after your death.
Many individuals fear they will lose control of their assets by developing a trust. This is just not the case, as a lot of trusts do not involve utilizing a bank or trust company as a trustee. Most clients who develop a trust serve as their own trustee during their lifetimes and will name a child or other relative as their follower trustee.
Ultimately, estate planning and establishing a trust has to do with preserving control, so that your possessions pass to whom you want, when you desire, at the least cost, and in the most efficient manner.