Establishing a trust lets you choose who will have control of making investment and management decisions for your assets after you’re gone. By picking either a financial institution or a family adviser to act as Trustee, you can ensure that someone you believe has the ability to manage your money for years or even decades will be in charge of your trust. Most importantly, having a trust in place can actually protect your family members in certain cases. If one of your heirs is disabled or has other special needs, a well-crafted trust can provide supplemental financial support while still allowing access to available government benefits. Also, if an heir gets divorced, trust assets typically arent considered as part of the heirs marital property, preventing the divorcing spouse from taking a share of your contribution to the family savings. Many Baby Boomers and even aging Generation Xers who started out with modest means want their children to have the same incentive to work hard and struggle for their financial prosperity, rather than having it handed to them. Moreover, a large fraction of Boomers believe their offspring dont know how to handle money, an opinion which might lead them to conclude their children also lack the wherewithal to handle a large inheritance. Research bears out those concerns. Figures from The Williams Group estimate that barely a third of families are able to maintain control of their wealth through the second generation, and only one third of that third manage to keep third-generation control. Relax! With some planning, you can actually provide whatever protection from your accumulated wealth that you believe your kids need. Its not difficult to keep your kids from squandering their newfound wealth indiscriminately. Its all about setting up controls the most powerful of which is creating a trust, either during your lifetime or written into your will. A trust lets you determine when and to what extent your kids and other heirs will get access to your financial resources. For instance, in most States, children can take control of assets that arent held in trust when they turn age 18. But with a trust in place, you can choose whatever age you want. One common strategy is to make partial distributions at various ages ranging from ages 25 to 45, but trust law allows for longer terms at your discretion. You can also craft the trust to allow the trustee to make distributions to your heirs at regular intervals, helping the money last as long as possible while still making it available in times of true need.
Posted on: Sun, 23 Nov 2014 04:26:38 +0000
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