When
most people think about trust funds, they envision spoiled rich kids and
wealthy families trying to dodge taxes on their piles of money. But what they
might not realize is that trust funds can be an incredibly useful—even
vital—tool for middle class families, as well.
Although the public image of a
"trust fund" seems to paint the picture of wealthy, silver-spoon
wielding children, the reality is these tools are for more than the "upper
crust". In fact, trusts are quite a powerful tool for the middle class to
employ as well.
Ready for a crash course in
“trusts”? If yes, then check out a recent article in Fox Business titled “Is a Trust Right for You?” So is a trust right for you?
Depending on your needs and the
needs of your family, trusts can be as malleable as they are powerful. You can
make a trust conform to just about any goal you can set. Think of it like this:
a business entity, whether a corporation or a limited liability company (LLC),
is something different than the owner or the manager. This is so the business
entity can accomplish business goals higher and apart from the individual.
Similarly, a trust is its own
kind of entity, legally distinct from the one who sets it up (the settlor), the
one that runs it (the trustee), and even those who receive from it (the
beneficiaries). Why? Because the trust serves a singular purpose (or purposes)
as determined by the settlor and carried out by the trustee. The major
difference between a business entity and a trust is the focus – business or
personal?
So what goal(s) can move you to
create this entity, the trust? There are many commonly shared goals and the original article
covers the basics, to include these seven:
- You Don’t Want
Your Kids to Inherit at Age 18 - You Want to
Protect Against Creditors - You Want
Someone Else at the Helm - You Have a
Complicated Family Situation - You Want to
Avoid the Probate Process - You Want to
Take Care of a Disabled Child - You Want to
Safeguard Your Privacy
How do you accomplish these
goals with a trust? Read more about it in the original article, and then put
your pen to paper for a personal brainstorming session.
The more you know the better you
can plan for yourself and your loved ones.
For more information and articles on
estate planning and elder law topics, please visit our website
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Reference: FoxBusiness (October 25, 2013) “Is a Trust Right for You?”