Well-crafted estate planning should include trusts. Even if you don’t have a fortune, your assets are still yours. Do you have a family vacation home? Trusts are a great way to establish ground rules and keep the taxman from claiming it later.
What is a Trust?
A trust establishes legal protection for the trustor’s assets and ensures those assets are divided according to the trustor’s wishes. Trusts can also be vital in deciding how a business’s management is passed to the next generation, for those who own a family business.
Benefits of a Trust
A trust can be used to minimize estate taxes, allowing the third party to hold your assets. It can also help protect your assets from creditors, and it can outline the beneficiaries of your inheritance. By having a trust, you can help protect your assets if your beneficiary is a minor or has a mental disability.
Setting up trusts is an excellent way to transfer your wealth to another family member while still retaining control over your assets. Your assets can be passed over, tax-free, to your children in the future. Until your children are of legal age, a trustee would have full discretion over how and when to distribute your assets according to your trust.
A trust can also be an excellent opportunity to help support elderly parents. It allows you to set aside a designated amount for your parents, and the income would then be paid out to them directly each month. If they pass before you, you can transfer the capital to another member of your family.
Trusts are an essential and useful document to have in place earlier rather than later. Give us a call to ensure you get the best professional advice for the future, today.