5 Circumstances When Establishing a Trust is a Good Idea
Are you wondering about the circumstances when to set up a trust?
Keep reading for our 5 circumstances when establishing a trust is a good idea. Let’s go!
What Is a Trust?
The simple answer is that a trust is a legal document. Any individual or organization setting up a trust is called a grantor.
The trust owns the assets or property on behalf of an individual or group of individuals. These are called the beneficiaries. Lastly, the individual who controls the trust is known as the trustee.
1. Avoiding Probate
One of the most common reasons why people establish a trust is to avoid probate. This can reduce the number of legal fees, time and paperwork wasted after your death.
The probate is the process in which your will has to be confirmed as valid. But by establishing a trust, your family can avoid this altogether and gain access to your assets and property earlier.
2. Charity Trust
Did you know that nearly 60 percent of Americans regularly donate to charity? Although the total number of charity givers has fallen recently, the total amount of donations has continued to rise.
Many people choose to donate to charity via a charitable trust. By setting up a charitable trust, you can give away assets and property while continuing to use them while you’re alive.
3. Reduce Estate Tax
Your estate tax is the amount taxed on your property when it’s transferred to your beneficiaries after your death.
By setting up a trust, you can significantly reduce your estate tax. In some cases, you can even avoid estate tax completely.
4. Distributing Property and Assets
Many family feuds are caused by arguments around dividing up assets and property after the death of a relative.
But if you set up a living trust, you can have greater control over the distribution of your property and assets after your death. This provides much more security compared with
5. Finance Higher Education
Over 70 percent of students graduate from college or university with a significant amount of student debt. By establishing a trust, you can pay for the education expenses of the young people in your family.
You can specify whether you only want to pay for the tuition fees associated with higher education, or additional college expenses, such as books and accommodation.
Establishing a Trust
Now you know in which circumstances establishing a trust is a good idea.
If you want to make sure your children graduate without significant student debt, or you want to avoid family feuds over your estate, you need to consider a trust.
At the Law Offices of Manfred Sternberg and Associates, we encourage clients to visit us during any life changes.
We are happy to assist you. Contact us to schedule an appointment.