Providing for your family has been one of the most important parts of your life for as long as you can remember. But every so often you think about what might happen to your family if the unspeakable happens to you and you are not there for them anymore.
Thinking about a day when you are no longer around to provide for your family is difficult, but unfortunately necessary. You care about your family and want them to be safe and happy for the rest of their lives, but since the future is unknown, thinking about estate planning is important if you want to ensure the security of your family’s future.
Estate planning and creating secure support for your family in the future is the best way to make sure you can still provide for your loved ones after you are gone. You might want to think about creating a trust in order to do this.
What is a trust?
A trust is a formal document that allows you to lay out guidelines for how you want property and other assets handled by your beneficiaries. Trusts are popular among people because they help beneficiaries avoid probate and reduce estate tax liabilities. Trusts also provide privacy to your estate as they are not public record.
Trusts are useful to people who want more control over their assets. In a trust, you can designate how you want the contents used. For example, if your children are minors and you do not want them to immediately access their benefits, you can elect to restrict access until you believe they would be able to manage their finances.
What kinds of trusts are there?
Depending on your circumstances, there are different types of trusts you can set up in order to best suit your situation. Some kinds of trusts and what they do are:
- Revocable (also called living trusts): can be altered during the trustmaker’s lifetime
- Irrevocable: cannot be altered after creation
- Asset protection: protects claims from future creditors
- Charitable: benefit a particular charity or the public
- Special needs: for people who receive government benefits
These are just a few kinds of trusts you can establish in order to provide for your family. Each have different guidelines and circumstances that will work best depending on your personal situation.
Setting up a trust may seem like an intimidating task, but it can be an important part of your estate plan. A trust is a straightforward way to protect your family and make sure they are cared for should something happen to you.