You’ve probably heard the term “trust-fund baby.” But you don’t have to be among the super wealthy to have a trust. Trusts distribute certain assets with minimal tax impact after your passing—and that’s something anyone can benefit from.
Trust pass assets on without the need to disclose all of your assets to the entire World. Further, when you leave something to someone in a will, they get it with no conditions. They can sell it, give it away, or use it how they like. A trust gives you the option to place terms and conditions of distribution even after you pass.
When you put cash, securities, real estate, or valuable belongings in a trust, you get to decide how and when that beneficiary gets the asset. You can set requirements that must be met and stipulate how the money can be used.
The beneficiary of a trust can be anyone or anything: a pet, a child, a grandchild, even a future child that has yet to be conceived. It can also be an organization or charity.
Trusts can protect assets from being taxed by taking them off your balance sheet. When you establish a trust, you appoint a trustee to manage or distribute it, and you no longer control that money. When you die, it’s not considered yours and so it’s not taxed. If trusts are set up properly, they can even be exempt from estate taxes.
Because trusts are more complicated to oversee than a will, which only needs management once in a lifetime, they do cost more to administer. However, when you consider the benefit of being able to protect valuable assets from mismanagement, it’s well worth the cost. Handled properly, a trust can be a gift that keeps on giving.
Over the past 33 years, the Law Offices of Christopher A. Benson has helped more than 800 clients prepare and utilize simple and effective planning techniques to protect them and their families in order to avoid probate, save estate taxes, save money and save added emotional burden that comes from long term illness and/or death of a family member. Give us a call to schedule a free consultation to find out how we can help you and your family.
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