The estate plan you make now will help determine the fate of your family’s wealth. Therefore, if you want future generations to benefit from the family fortune, you must plan accordingly.
An irrevocable trust can help you achieve that and ensure that the family’s wealth is passed down to your family in decades to come. Here is how it happens.
The assets you put in a trust do not belong to beneficiaries
The beneficiaries of a trust are not the legal owners of trust assets. Therefore, they cannot sell or dispose of the assets held by the trust. Similarly, trust assets are safe from lawsuits against beneficiaries, nor can creditors repossess them to recover a debt owed by a beneficiary.
The trustee manages assets on behalf of beneficiaries
You do not have to worry about the misappropriation of estate assets by your loved ones. Trust assets are under the watchful eye of the trustee, who must always act in the best interests of the trust and its beneficiaries. It’s a win-win since your loved ones who benefit from the trust will keep the trustee in check in case of mismanagement of trust assets.
Trusts also help minimize estate taxes and associated costs
Assets in a trust are not considered part of the taxable estate, and you can save a lot that would have otherwise gone to the government. Additionally, since a trust does not have to go through probate, you will also avoid expenses like probate fees.
What do you need to do?
Before setting up a trust, you should understand how things work before determining the best trust that will help fulfill your objectives. Afterward, you must ensure you do everything by the book. You do not want to end up with an improperly funded trust or one not recognized by the law. Having experienced legal guidance is crucial.