The main purpose of a trust is to transfer assets from one person to another. Trusts can have different types of assets. Investment accounts, houses and cars are examples. One advantage of a trust is that it usually prevents your assets (and your heirs) from going through probate when you die.
Think of a trust as a huge bank vault where you can park all your money and assets. You can put your house in the vault, as well as your investment portfolio, business interests, your classic cars and even your jewelry. The trust is controlled by a “trustee”. A trustee can be one of your adult children (although this may cause family disputes), a sibling, a good friend, or a professional you pay to supervise the trust.
Trustee actively protects and manages trust funds according to your wishes. The trustee may also make distributions to your designated “beneficiaries”, which may be your children, grandchildren, a charity you support, or anyone else you name. A revocable living trust is an instrument created for the purpose of protecting your assets during your lifetime. It also creates an avenue to pass your assets easily after your death.
Creating a trust has several benefits. The main advantage is to avoid the legalization of inheritance. Putting your important assets in a trust can give you the peace of mind that the assets will be passed to the beneficiary you designate, on the terms you choose, and without first undergoing lengthy legal process. A trust can also provide you with some level of privacy regarding information shared about your estate.
Another feature is that placing your assets in a trust will help protect them in case you become incapacitated. Finally, by placing the estate in a trust and appointing one or more sophisticated trustees to oversee the trust estate, founders can increase the likelihood that trust assets will be managed in a manner that preserves and increases that wealth, so that one or more generations of beneficiaries also obtain maximum support if desired by the grantor. When you hear the words “trust” or “trust fund”, the first picture that comes to mind is a wealthy family in a mansion with inherited wealth handed down from generation to generation. The Rockefellers are perhaps one of the most famous and wealthiest families who use trusts to transmit their wealth.
A trust greatly expands your options when it comes to managing your assets, whether you're trying to protect your estate from taxes or pass it on to your children. This tax is separate from wealth taxes and is designed to prevent wealthy seniors from channeling all their money to their grandchildren. The financial planning services offered through Global Wealth Advisors are independent and unrelated to You may have heard a little about trusts and you know that wealthy families and their highly paid advisors know when and how to set up trusts to protect and increase their wealth and save on taxes. But you definitely don't need to be fantastically rich for a trust to make sense, despite its typical association with millionaires and billionaires.
Many people see trust funds as tools to protect the wealth of the very rich or to provide their heirs, sometimes ridiculed as “trust funds for infants with independent income, freeing them from the need to earn a living”. Usually, people use QTIP trusts to ensure that a fair share of their estate passes to their own children and not to someone else's. .
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