Do you consider trusts to be instruments of the wealthy? While it is true that many Americans of means have trusts to protect and pass their wealth, there are a number of reasons why trusts can also be useful for middle-class families. Here are 7 of them:
- Control distribution of assets. You wouldn’t hand over your car keys to a child who has had no proper preparation for driving, and chances are you would not want to hand over all your assets to a teenager either. But if both parents die at the same time, the children would inherit all the assets upon their 18th birthdays. A trust allows you to specify how and when you want your children to inherit.
- Protect assets from creditors. Placing an inheritance in a trust ensures that those assets are protected from your heir’s — or their spouse’s – creditors. Consider a Lifetime Asset Protection or Wealth Creation Trust.
- Protect inheritance from spendthrift heirs. Not everyone is good with money. If your heirs fall into that category, you can use a trust to ensure the assets are not frittered away due to spendthrift behavior.
- Protect inheritance for children of prior marriage. You can use a trust to both provide for your current spouse and any children from a previous marriage.
- Provide for a special needs heir. Leaving assets outright to an heir with special needs could disqualify them from receiving important government benefits. Leaving those assets in trust bypasses this potential risk.
- Avoid probate. Assets can pass to heirs without going through probate by using a trust, saving beneficiaries the time and expense of the probate process. Probate is an expensive, public and unnecessary court process you can keep your family from having to deal with.
- Protect privacy. Once a will is entered into probate, it becomes public; a trust is a private document that will protect your family’s privacy.
If you would like more information about protecting your loved ones, contact a Personal Family Lawyer® today to schedule a time for us to sit down and talk.
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