Trusts can protect you and your family from the many legal threats that can arise after you pass away. Among the most common threats are divorce, fraud and lawsuits. A trust can help you keep your assets safe and ensure that they pass to the people you want them to.
A trust is a legal arrangement wherein one person transfers ownership of assets to another, called the trustee. The trustee manages the assets and decides how to distribute them to a beneficiary, usually a child or other relative. The settlor (or grantor) creates the trust by signing a legal document.
The settlor’s responsibilities are to transfer ownership of assets to the trustee and to follow the terms of the trust. The settlor also names a trustee in the trust document, and the trustee administers the trust assets in accordance with the terms of the trust.
An irrevocable trust can be a useful tool for protecting beneficiaries from probate and estate taxes. It is a good idea to work with a financial professional to determine whether an irrevocable trust is the best choice for your needs.
You should also consult with a lawyer to draft your trust documents and make sure that you have all of the required documents. A good lawyer will be able to answer any questions you may have and help you choose the right type of trust for your needs.
If you have a prized collection of art, coins or stamps, setting up a trust can help you leave those items to the people who will cherish them most. This can include the museum or nonprofit organization that owns them, a specific individual or even a family member.
As your life’s work and assets change, you should re-evaluate the trust to make sure that it still works for your family. You might add new beneficiaries, change the distribution of assets or adjust the way the trust is managed. This will allow you to be flexible and adaptable when life’s changing circumstances occur, such as the birth of a child or an inheritance from your parents.
Creating a trust can be a long and complex process, so it’s important to work with an attorney or a trusted financial professional to ensure that your estate planning is effective and meets your goals. The fee for this service will vary, but a professional can often be worth the cost.
Your business has taken years to build and you don’t want to risk losing it in a divorce or lawsuit. Having a trust in place can protect your assets and allow you to transition out of the business as smoothly as possible without going through probate.
In addition, a living trust can help you control how you want your assets distributed after your death and can protect them from probate. It can also help you maintain privacy, keeping your family’s financial matters out of public view.