Contrary to popular belief, the requirement for a trust is not tied straight to your level of wealth, although wealthy individuals are usually more predisposed to developing a trust, or multiple trusts, for a variety of reasons. The requirement to develop a trust is more generational, based upon the easy fact that life has just gotten more complicated.
So here are 7 non-tax reasons to develop a trust:
1. Avoiding probate proceedings so that your beneficiaries can quickly transfer possessions of a decedent with privacy and at a reduced cost.
2. Safeguarding beneficiaries from diminishing their inheritance by staggering circulations over a variety of years or upon the achievement of certain turning points, such as finishing from college.
3. Attending to disabled recipients, and recipients with substance abuse concerns. A trust can permit a disabled recipient to maintain their eligibility for government advantages, and can avoid a beneficiary with drug abuse problems from using their inheritance to sustain their addiction.
4. Control how your assets will be given through younger generations by ensuring your estate is passed down through your family and not to your in-laws or surviving partner’s new partner.
5. Lender protection for your beneficiaries from their lenders, or ex-spouses in case of a divorce.
6. Debt consolidation of properties during your life time, which enables effective management in the event of a special needs and upon your death.
7. Planning for a blended family, when you remain in a second marriage and have your kids, step-children, and perhaps, our A trust can guarantee that your partner which all of your children will be looked after after your death.
Many people fear they will lose control of their possessions by establishing a trust. This is simply not the case, as the majority of trusts do not include utilizing a bank or trust business as a trustee. The majority of customers who produce a trust act as their own trustee throughout their life times and will name a child or other family member as their successor trustee.
Ultimately, estate planning and developing a trust is about preserving control, so that your assets pass to whom you desire, when you want, at the least expense, and in the most effective way.