Many of us have been advised to get a trust but not all know how to make the most of it. The reason why most people choose to start a trust is because it can help preserving their wealth, even well after their death. There are three ways having a trust can preserve your wealth, ensuring a financial secure future for you and your family members.
Having a trust helps allocate the wealth among family members.
For example, a trust will help if you have young or irresponsible children who are not capable of managing their inheritance. With a trust, you can specify when or how they are able to receive distribution from the trust. For example, a trust can be specified to distribute when the children reach a certain age, or when they complete an achievement such as completing a college degree.
Because of this, by having a trust, parents can seek to influence their children’s behaviors even after the parents pass away.
Assets in the trust are managed by professionals
Some people are concerned that their heirs do not have the experience or professional knowledge to manage their inheritance. With a trust, however, you can appoint a trustee who has the ability to manage the fund. This ensures that the heirs will still receive distribution but helps to protect the wealth. With a professional manager acting as a trustee, your wealth will be properly managed and distributed as per your instruction.
Protecting assets from creditors
Assets held in a trust are often off-limit to creditors, and therefore can be preserved for intended benefactor. That means if the child is in debt, his or her lender will not be able to claim what is in the trust to recover the debt. Also in case of divorces, assets in a trust will also not be subjected to be split as a settlement.
Therefore, if you have reasons to worry that your child are likely to incur debt in the future, having a trust is a good start to ensure that he or she will always have a safety net.
Having a trust is not only a way to pass on wealth to your family members but also help preserve the family wealth through generations. With a trust, you will be able to dictate how the wealth will be managed and distributed, guiding your heirs toward certain goals, or simply creating a safety net for your family members.
To find out more information and set up a trust, contact a specialist at Heritage Living Trust.
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