Trust funds are frequently associated with affluent families that are looking for strict and controlled ways to pass on wealth to future heirs but there are many different advantageous reasons to consider setting up a trust even if you aren’t especially wealthy.
Establishing a trust fund is not necessarily easy and you must consider all of the steps required before going through the process of opening a trust.
You should schedule a consultation with an estate planning attorney to discuss how a trust is structured and the many ways in which a trust can help to protect your assets or even preserve your wealth from successors down the line.
A trust fund refers to a fund that owns assets such as real estate, stocks, cash, mutual bonds, a business, antiques or paintings. These assets are then distributed after someone passes away. The individual who chooses to set up a trust fund is known as the grantor, while the people, person or organization getting the benefits is known as the beneficiary. Setting up a trust might initially seem like drawing up a will. These are two distinct processes and legal structures.
A trust fund ensures that the passing of your assets will happen in a way in which you intend, whereas a will details what you would like to happen. The trust fund, therefore, is the important vehicle for transferring assets. You might be considering putting together a trust fund because you have a complicated financial situation and intend to preserve your wealth through asset distribution but there are other financial advantages to using a trust fund.
This includes safekeeping of your assets, reducing estate and gift taxes, and more. You establish the roles on how beneficiaries are able to tap into and spend the assets and money you have allocated through various provisions.
This is what makes it so important to retain an experienced estate planning attorney who understands this process and the common pitfalls that people experience in the estate planning process so that these can be avoided.