We have a lot of clients who are surprised when we recommend using a trust to protect their assets.
Our clients will say, "a Trust? but I'm not wealthy.
Trusts are not just for wealthy people, they're for middle class American's who wish to ensure that their hard earned savings actually goes to their family when they pass away.
Our clients will also say, I have a Will, isn't that just as good?
The short answer is no, it's not.
Let's start with;
What Is a Trust ?
The definition of a trust is “a special type of legal entity that holds property for the benefit of another person or person(s).” Trusts offer many important advantages for families who wish to manage their assets wisely.
Depending on the type of trust you establish, your trust can accomplish things such as:
- Protecting your house and savings from the catastrophic expenses of long term care costs, nursing home care and Medicaid;
- Protecting your house and savings from creditors and lawsuits;
- Distributing assets to heirs while minimizing / eliminating the hassles and expenses of probate;
- Providing charitable gifts;
- Ensuring the financial well-being of family members with special needs;
- Reducing / eliminating estate taxes.
- Protecting assets from a child's divorce
Trusts are also essential for families who want to ensure their children and grandchildren under the age of 18 will be beneficiaries of their estate, but also want to be able to set specific rules that control how and when the assets will be distributed and used.
Let's go back to why a Will is not as good as a Trust.
A Will is a just list of suggestions as to how you would like to have your assets distributed at your passing.
However, a Will can't guarantee that those assets will be available at your passing.
Example: If you state that you would like to have your children receive your house at your passing but you had to sell your home to pay for the high cost of a nursing home, the house won't be there to give to your children, they will receive nothing.
However, if you were to have transferred your home to a Trust the home would be there for your children. You would not have to sell it to pay for a nursing home, it is untouchable by the nursing home, they can't put a lien on it.
The same goes for anything else transferred to the trust [cash, investment accounts, etc.]
A properly drafted Trust agreement will accomplish all of this.
The great thing is that you get to choose who your beneficiaries are, what they will receive and how they will receive it. You have complete control over that [just like a Will but with complete protection].
Contact us today to learn more about how trust can benefit you and your family.
download our flow chart - How A Trust Works