Protecting and passing along wealth

If you own property (a family home, for example), valuables (art, jewelry, and so on), and financial assets (savings, a stock portfolio, retirement accounts, insurance, etc.), you should definitely consider avenues of asset protection to ensure that these items are passed along to the intended beneficiaries at some point. Whether you have a last will and testament in place or not, family trusts could end up serving as an ideal means of protecting and passing along your accumulated wealth and assets in the event of your death. Here is a quick guide to how this structure works.

Settlors, Trustees and Beneficiaries

There are three key elements involved in a family trust structure: the settlor (you - the person creating the trust and transferring assets to it), the trustee (you - the person that will hold and be responsible for the trust assets), and the beneficiaries (you and your loved ones - those named to have a beneficial right to the use of the assets held on trust). You relinquish ownership of the property listed to the trust. So in the case of a family home trust, you would no longer own your property. However, that does not mean you give up all rights to your property (or assets).

Use of assets while you are alive

You may specify in the trust that you can continue to use assets until your death. After all, you probably don't want to move out of your family home just to protect it with a trust. But your trustee will actually control the holdings of the trust, albeit to the specifications laid out in your trust deed. Your beneficiaries will become the legal owners of the assets left to them at the time designated by the trust. In most cases this will be after 80 years, or after both settlors (you and your partner - if you have one) have passed on.

The benefit of asset protection while you are here and living

The best reason to choose this form of asset protection is that it helps to ward off third-party claims. If you own and operate a business, for example, you don't want creditors coming after your personal assets to repay business debts. So long as your home is not owned by you, they can lay no claim to it. The same is true of other types of creditors and claimants, such as extended family members. Even a last will and testament is not ironclad - it can be contested during the probate process. Beneficiaries could end up waiting weeks, months, or even years to lay their hands on the assets you've left them in a will. This makes family trusts distinctly advantageous.

So why not learn more and register with TrustUs today.

After all, it's in your hands.