A trust is an arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. It can include anything, ranging from your real estate and life insurance settlement to cash and investments. Trusts offer a way to leave a legacy and protect your assets while avoiding probate costs and ensuring your loved ones receive the maximum value from your estate and assets.
Here are a few reasons to set up a trust to manage your wealth and protect what is rightfully yours.
They Can Offer Protection
Protecting your assets from lawsuits and probate fees can be achieved by creating a trust. This is extra important for people in professions known for litigation, such as doctors and lawyers. When a person passes away, their estate usually goes through probate, where the public can see the will and assets. Probate fees can range from 3% to 8% of your estate in addition to estate tax and income tax that are imposed upon any estate. If you place your assets in a trust, you can shield those assets from public scrutiny and record. These assets are then off-limits from creditors and not subject to probate fees.
Keep You Safe from Unnecessary Taxes
Different kinds of trusts offer different tax protections. A life insurance trust can protect life insurance death benefits from any estate taxes. You can also set up a trust fund for a child with a tax-free gift to the maximum level. Revocable living trusts designate a trustee to manage and control the grantor’s property. These trusts offer management and credit shelter where estate taxes can be reduced. Additional tax benefits include savings from reducing transfer taxes and the size of the estate with charitable contributions.
Provide Flexibility and a Lasting Legacy
Trusts offer several ways to provide for beneficiaries. They allow for flexibility to put aside funds for education or medical support or decide when funds can be distributed at what age or interval. Having a trust offers a specific way to leave a legacy for the people and organizations that mean the most to you. You have the power to designate exact amounts of contributions and any guidelines for passing down your assets.
Trusts are about planning for your future and the ones you love. To determine the best way to allocate your funds in a trust, it is advisable to talk with a trust & estate management specialist. Call (918)492-1361 to speak to a knowledgeable investment advisor and start preparing for the years ahead.