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Benefits of a Family Trust

THE BENEFITS OF A FAMILY TRUST 1. Protect selected assets against claims and creditors - for example, to protect your family home from the potential failure of a business venture. 2. Set aside money for special reasons, such as a child or grandchild's education. 3. Ensure your children, not their partners, keep their inheritances. 4. Avoid unwanted claims on your estate when you die - such as from a former partner. WHO'S INVOLVED Å SETTLOR TRUSTEES BENEFICIARIES LET'S LEAVE IT TO THE BOYSI IT'S ME LOVE YOUR LAWYERI The person or company The people who benefit from the trust, for example who creates the trust, e.g. YOU. members of your family. The people who manage the trust. If you are the settlor you can also be a trustee. It's also a good idea to appoint an independent trustee like a lawyer or acçountant. WHAT'S INVOLVED 1. You will need to decide what assets should be put into the trust. 2. Ownership of these assets will then be transferred to the trust. 3. The trust then owes a debt back to you, the settlor. This debt can then be 'forgiven' through a process called gifting. A legal document called a 'trust deed' will formally set up the trust. 4. 5. It will appoint the trustees, list the beneficiaries, and state various rules for the administration and management of the trust. 6. The trust deed needs to be very carefully written, preferably by a lawyer. COSTS AND RISKS COSTS OF TRUSTS Family trusts can be complex and time consuming to administer. It costs money to set them up and there are generally ongoing legal and accounting fees. RISKS OF TRUSTS If a trust is not set up or managed well, there can be considerable inconvenience and cost. ONCE YOU PUT YOUR ASSETS INTO A TRUST, YOU NO LONGER PERSONALLY OWN OR CONTROL THEM, INSTEAD, OWNERSHIP PASSES TO THE APPOINTED TRUSTEES WHO MUST ACT UNDER THE TERMS OF THE T RUST DEED IN THE BEST INTERESTS OF THE BENEFICIARIES. GETTING ADVICE Family trusts should typically be formed by a lawyer or a professional trustee company. Robert L. Shepard Professional Lew Corporation TM Twitter@Passarelnc Facebook Tumblr SOURCES

Benefits of a Family Trust

shared by Passare on Dec 15
Trusts are perfectly legal but they aren’t magic. In a nut shell, trusts can protect assets as they are a separate legal entity to yourself and you can stream income to take advantage of marginal ...






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