There are many different advantages to establishing a trust fund and although you might have heard that these are primarily vehicles used by affluent families looking to pass on benefits into the future, trust funds offer a variety of benefits, such as safe keeping of assets and tax advantages like minimizing gift and estate taxes.
You also maintain some level of control when establishing a trust fund because you can determine how these assets will be passed on to future generations, which includes rules about how beneficiaries can spend the money.
You might want to set up a trust, for example, that only allows for the distribution of assets for a specific purpose, such as college education or starting a business. There are additional reasons for families to contemplate putting together a trust fund.
A trust fund can be used to distribute assets to adult children over time in order to give them chances not to lose all of the money due to a couple of poor decisions. A trust fund can also be set up for minor children who are not legally allowed to own such a property and certainly not in a position to maintain it. Furthermore, families that have children with special needs should contemplate using special needs trust so that those children are still able to receive their critical government benefits.
Since assets inside the trust are not technically owned by the children and aren’t considered part of their wealth, those special needs children as adults would not have their benefits reduced or eliminated, including social security income and Medicaid.
This gives a child with disabilities financial security after the parents are no longer around, which can be a significant source of peace of mind for those parents who are concerned about how to protect their loved ones’ interests well into the future.
The support of an experienced estate planning attorney in Pasadena is key for clarifying your obligations and requirements. The support of an attorney can help you to avoid many common pitfalls and clarify that you have protected yourself to the fullest amount possible.