A trust is a great way to transfer assets from one person to another. It can include a variety of assets, such as investment accounts, houses, cars, and more. One of the main advantages 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 large bank vault where you can store all your money and assets.
You can put your house, investment portfolio, business interests, classic cars, and even jewelry in the vault. The trust is managed by a “trustee”, who can be one of your adult children, a sibling, a good friend, or a professional you pay to oversee the trust. The trustee actively protects and manages the trust funds according to your wishes. They may also make distributions to your designated “beneficiaries”, which could be your children, grandchildren, or any other person or charity you name.
A revocable living trust is an instrument created for the purpose of protecting your assets during your lifetime and passing them on easily after you die. Creating a trust has several benefits. The main one is avoiding probate court when it comes to inheritance. Putting your important assets in a trust can give you peace of mind that they will be passed on to the beneficiary you choose and on the terms you set without having to go through lengthy legal proceedings.
A trust also provides some level of privacy regarding information about your estate. Another feature is that placing your assets in a trust will help protect them if you become incapacitated. Finally, by placing the estate in a trust and appointing one or more sophisticated trustees to oversee it, founders can increase the likelihood that the trust assets will be managed in a way that preserves and increases their wealth so that one or more generations of beneficiaries also receive maximum support if desired by the grantor. When you hear the words “trust” or “trust fund”, you may think of wealthy families living in mansions with inherited wealth passed down from generation to generation.
The Rockefellers are 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 them from taxes or pass them 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. You don't need to be fantastically rich for a trust to make sense; many people use QTIP trusts to ensure that their estate passes to their own children and not someone else's. The financial planning services offered through Global Wealth Advisors are independent and unrelated to any particular trust fund. Trusts are powerful tools for protecting and increasing wealth and saving on taxes.
They are not just for millionaires and billionaires; anyone can benefit from setting up a trust fund.