Trusts can be powerful tools for families across the financial spectrum to protect and manage assets, care for loved ones, and potentially realize generational tax savings. They can also provide privacy by avoiding public probate, and customized asset distribution, such as for health, education, maintenance, and support.
For those with minor children, a trust can help ensure financial security for the next generation by appointing a trustee to oversee funds until the children reach a designated age when the assets would go to them outright. For spendthrift children, trusts can restrict distributions, protecting assets from reckless spending and/or creditors while offering structured support. Special needs trusts can provide support for disabled family members without jeopardizing government benefits.
For high-net-worth families, trusts can aid in planning for the estate tax. Transferring assets to an irrevocable trust, for instance, can reduce the value of the taxable estate, potentially saving substantial taxes.
Charitable trusts, like Charitable Remainder Annuity Trusts (CRATs) or Charitable Remainder Unitrusts (CRUTs), can provide an immediate tax deduction, income to you or beneficiaries for a term, with the remainder going to a chosen charity.
While trusts do involve drafting fees and often ongoing administrative costs, they can offer personalized solutions to intricate problems and complex family dynamics.
This article was featured in Issue 2 of Ballast Magazine. Read the full magazine here: ballastplan.com/connect