A trust allows a trustee or third party to direct and hold assets within a fund on behalf of beneficiaries. A trust expands your choices when it comes to how to manage your assets, whether your intention is to pass on your legacy to future generations or safeguard your wealth from exorbitant taxes.
When you hear someone talk about a trust or trust fund, you may think about a family with excessive amounts of wealth where money has been passed down from generation to generation. However, anyone regardless of how many assets they have can benefit from having a trust. Many people write a trust to help minimize the fees and stress for their closest loved ones, so that they don’t have to deal with prolonged legal issues during a period of grief.
Once you have written a trust, you have essentially:
- Determined to whom and how your assets are to be distributed
- Protected your wealth from creditors or beneficiaries who do not have your best of interest in mind
- Chosen where assets must go in the event of passing
- Avoided the often lengthy and expensive probate court process
A trust allows you to transfer assets quickly and in a private manner. If your estate goes through probate court, the entirety of your wealth may be viewable by the public. One of the main reasons people write a trust is so that their assets do not go through probate, preventing the government from having any say in how and to whom assets are distributed. If someone passes away without a proper estate plan, then their estate may be handled based on state intestacy laws. As you can imagine, most people would prefer to not have a government entity managing their legacy after death.
As a trust lawyer at W.B. Moore, Attorney at Law would attest to, it’s important to get started drafting your estate plan so you can protect your legacy as it is passed onto future generations.