Why create a family trust?
A family trust is a good option to explore when you decide it's time to protect your assets in order to pass them on to loved ones in the event of your death. The benefits of choosing a family trust over (or in addition to) a will are myriad. First, you relinquish ownership of assets to the trust so that creditors cannot claim them, ensuring that they go to your loved ones. In addition, there is no probate process following your death if a trust has been established, significantly reducing the time and hassle involved in transferring assets to beneficiaries at this time. In addition, the contents of your estate remain private. Before you can achieve these results, however, you must first figure out how to form your family trust.
What assets do you wish to protect?
Whether you opt to create a family home trust to protect your main asset - your home or you elect to form additional family trusts as a means of passing along other valuable assets, the first step is deciding what, exactly, you wish to place in trust. Keep in mind that trusts are not ideal for everything you want to put into the hands of your loved ones. For example, items of sentimental value (but little or no monetary value) can be transferred through a will instead since there is no reason a creditor would seek to recoup money owed by laying claim to items that couldn't be sold to repay debts.
Who do you want to benefit from your family trust?
Next you need to figure out which loved ones you want assets to be transferred to, as well as the rules for distribution. You may not know this, but you don't necessarily have to die for items in a trust to be disbursed. You could have assets or funds held in trust distributed to children incrementally on their birthdays, or held in trust until a specific birthday (18, 25, 30, etc.). You could hold money in reserve to pay for college tuition. Of course, assets held in trust can also be transferred to beneficiaries at the time of your death. You just need to determine who gets what and when.
Who should be a trustee?
You also need to select a trustee. This person will administer your trust. More often than not this will be you and your partner. Most people elect to have a professional such as a lawyer, accountant or trustee company act as a trustee. But this tends to be in the later years when you hold more than non-income producing assets on trust. Once you have your plan in place, all you need to do is start to take action and do your homework on the best solution for your situation.
So why not learn more and register with TrustUs today.
After all, it's in your hands.
