What Is A Trust
A trust is a highly valuable estate planning tool. One that can be beneficial regardless of your background, your net worth, or what you have to leave behind. The purpose of trusts is to provide peace of mind. You can place assets aside for loved ones, so they can benefit from them in a responsible manner.
Trusts can come in a variety of different forms and guises depending on the unique situation behind them and the stipulations dictated. The different types of trust available include:
- Asset Protection Trusts
- Family Trusts
- Property Protection Trusts
- Flexible Life Interest Trusts
- Vulnerable Persons Trust
- Bereaved Minors Trust
It is possible to hold all manner of different assets in a trust. This includes but is not limited to:
- Family Heirlooms
Who Is Involved?
When it comes to a trust, there are generally three parties involved. The person providing the fund is called the settlor, the one inheriting is the beneficiary, and the party managing the fund is referred to as the trustee. The role of a trustee is to ensure that the assets are used in accordance with the settlor’s wishes. This prevents spending sprees and funds being used outside of the wishes of the settlor, allowing beneficiaries to enjoy their windfall responsibly.
As the settlor, you can set out the precise terms of the fund however you see fit. The conditions you put in place will outline how and when your assets are to be distributed by the trustee.
Why Set Up A Trust?
Protection and support for your loved ones. Trusts should be seen as cornerstones of estate planning. This is vital if you want your money to go as far as possible, or have specific requests regarding how/when it is to be handed out.
A fund is designed to benefit anybody, regardless of how many assets they have. This is because a trust is the best method of managing assets and ensuring that they are distributed exactly according to your wishes.
However, they can be complex to understand if you are unfamiliar with their structure. This can put a lot of people off and force them to automatically pivot to a will without considering if trusts would be a better option. If you are unsure about setting up a trust, contact a specialist today who will talk you through the process.
A Benefit Of A Trust
A trust ensures that you bypass probate, saving your beneficiaries large amounts of money. This ensures that your money is able to go a lot further.