You may have heard of a family wealth trust before but assumed that only the rich need a family wealth trust in their estate plan. While those with large estates can certainly benefit from the inclusion of a family wealth trust in their estate plan, so can those with moderate estates. A family wealth trust is simply one of many estate planning tools that can be used to protect your assets from taxes and probate in the short run while providing for future generations in the long run.
Including at least one trust in your estate plan is something that many people choose to do because of the variety of benefits that a trust can offer. Trusts allow you to shelter assets from creditors as well as from spendthrift beneficiaries. Trusts can also provide tax advantages as well as probate avoidance. Finally, a trust allows you to exert a certain amount of control over the assets placed in the trust long after you are gone by creating trust terms that control how the assets are invested and used.
To gain the most tax benefits and asset protection from your trust you will likely create an irrevocable living trust. The advantage to this type of trust is that once assets are transferred into the trust they cannot be touched by creditors, thereby assuring that the assets will be available for future generations. The downside, however, is that you cannot modify an irrevocable trust once it takes effect.
A primary benefit of a family wealth trust is the ability to control assets long after your death. Using the trust terms you are able to guide future generations by deciding what the trust assets can be used for ahead of time. Another significant benefit is that the assets held by the trust will, assuming the trustee manages them well, continue to grow long after being transferred into the trust. This, in turn, grows your family wealth and ensures that successive generations will benefit from your gifts.
You do not have to have a large estate in order to consider creating a family wealth trust within your overall estate plan. For more information on family wealth trusts and how one may benefit you and your family, consult with your Missouri estate planning attorney.
- Show Your Love by Creating an Estate Plan - March 21, 2023
- What You Need to Know About SECURE Act 2.0 - March 14, 2023
- The Lessons from Lisa Marie - March 7, 2023