People have long associated trust money with excessive wealth and poor life choices by young people. Another factor that adds to peoples’ misconceptions about trusts is that most folks don’t really talk about it if they get money from one. This combination of stigma and silence leads many to believe that trusts must are only for rich kids and they probably shouldn’t have one.
This couldn’t be further from the truth. Trusts are an important planning tool and can be incredibly valuable to preserving family assets and family peace. We see trusts as especially valuable when people have accumulated significant assets and have young beneficiaries.
In this case, the worst-case scenario can be very complicated. What happens if something happens to both parents in a family? Many times, other family can be relied on for care, but the financial side of a transition like that can be burdensome and confusing. This situation can be much easier if the hard decisions are already made by the parents in a document. That document is the trust.
With a trust in place, the beneficiaries don’t take immediate ownership of all the funds. Funds can be distributed to the beneficiaries over time allowing them to adjust to their inheritance and protecting that inheritance from creditors, legal action, and bad decisions. What’s more, you can also appoint a third-party trustee to administer the trust if you don’t wish to involve anyone else.
This trust doesn’t even have to be created until after you pass and can be named a direct beneficiary on your accounts so the assets don’t have to go through probate.
All in all, trusts can be a great tool to make sure money you leave behind serves the purpose you intend it to. If you have any questions about whether a trust may be right for you don’t hesitate to ask and we can direct you to the appropriate resources.