You may not always be in good shape to work and earn. In fact, you cannot even tell when you are permanently leaving this world. When that happens, have you prepared your family, their finances, education, and their needs? Setting up a trust is an excellent move in order to secure your family in your old age and even after death.
A trust is a way of bequeathing your assets to charity or individual so that your trustee can accomplish the disbursement after your death or at a certain period of time. A trust is also an important move in order to properly distribute your assets among your children. The trust makes sure that your assets are well managed by the trustee.
Be guided of the following steps on how to set up a trust:
Know the different trusts. Investigate each type of trust and choose one which suits your family needs. With the Living Trust, you can control your assets while you are still living. Upon death, this can be distributed to your heirs. On the other hand, the Testamentary Trust only takes effect upon the payer’s death. It works hand in hand with the last will and testament and helps reduce taxes on your beneficiaries. It doesn’t avoid probate unlike that of the Living Trust.
Choose a trust. Make sure that it is applicable to you and your family. Set up a trust after you have decided on which trust you choose.
Determine your trustee. Your trustee will make sure that you will claim the benefits and the terms of agreement will be carried out. Consult an attorney or a financial adviser about the trust that you plan to set up.
Know the requirements of the trust that you choose. Gather your requirements and fill out the form.
Obtain the necessary documents. Your attorney or financial adviser will provide these documents.
Fund the trust. Classify the assets that you will include in the trust. These assets should be those that you have full control.
A trust can serve various advantages. As a legal instrument, it can be used to distance the creator from some of his assets to guard them from possible creditors and to reduce tax liabilities as well. In addition, the trust can also be used to protect your estate, provide funds for your children’s education, and benefit chosen institutions and charities.
For whatever purpose you wish for your trust, it is important to know that you need to set up a trust to ensure the future of your family. You cannot tell what will happen tomorrow and the trust is a good way to manage your assets even after death. Also, the trust helps you ensure that your children and spouse will be provided of their needs without the threat that they may overspend. The trust helps manage the fund since it only releases to your beneficiaries a portion of the trust for a certain period of time. This means that if you have a fund of $500 000, you can allocate a portion monthly so that your beneficiary does not spend everything all at once.