Trusts can Protect your Assets and Assist with Estate Planning
A simple search of the dictionaries and online sources will quickly reveal that there are a variety of ways in which they define a trust. Unfortunately, most of these definitions are couched in legal terms that can present difficulties for the layman. Perhaps the simplest way to describe it is as a relationship in which an individual, referred to in legal terms as the trustor, allocates the right to manage his or her property and financial assets to a second party. This may be an individual or a group. Known as the trustees, the latter undertake to protect and manage these assets on behalf of one or more third parties chosen to be the trust’s beneficiaries.
In essence, these are legal instruments that provide an effective means to protect various assets both during the lifespan and following the death of the trustor and could, for instance, be the means to ensure that a financial legacy is maintained and continues to provide its benefits throughout the life of the beneficiaries and perhaps even beyond.
When a bequest is made without such a provision, there is a risk that it may fail to provide the benefits that the deceased intended. This is commonly the case with minor children and young adults who may simply perceive their inheritance as a windfall and have little experience of how to use it productively. Trusts guard against just this type of contingency and can be tailored to ensure that its proceeds provide the maximum benefits. For example, the trustees may be instructed to dispense a monthly allowance, rather than a lump sum, while also providing for special needs, such as the payment of university fees or purchase of a coming-of-age gift.
In practice, protecting a minor child’s inheritance is just one of several reasons why many people now chose this route, rather than relying solely upon a simple bequest. Just for a start, trusts provide one with a highly effective means by which to avoid the often punitive taxes levied on capital gains, as well as the payment of estate duties and other related costs, whilst also protecting one’s assets from third party creditors. In cases where a business may be involved, they are also a means by which to ensure that any transfer of ownership is able to proceed smoothly and effectively with no loss of continuity.
As is the case in most legal matters, you are certain to need some professional guidance if you are considering how best to plan your estate, whilst protecting its assets. At Secure Legacy, our aim is to secure the wellbeing of your family, and to do so, we provide a portfolio of relevant professional services. These range from drawing up wills and acting as executors, to estate planning and, of course, the design and management of effective trusts.
Our dedicated team consists of attorneys, tax advisors and experts in the field of deceased estates, each with extensive experience of his or her particular area of expertise. By engaging with our clients and forming sound relationships, we are able to gain the thorough understanding of their goals and aspirations, and of their financial affairs necessary to develop the most effective means with which to meet their unique needs with well-designed trusts.