The Advantages of Setting Up a Trust

Posted by vrlawgroup on June 25th, 2019

Even though trusts or trust funds may seem suitable for the wealthy people alone, there are many benefits of creating them even for those who are not multimillionaires. With trusts, you can effectively manage your assets and property and ensure that they are distributed as desired after your death. This can be quite helpful in saving your family lots of stress, paperwork, money, and time. Read on to know the immense benefits of setting up a trust.

Asset protection

Trust funds are one of the most effective asset protection strategies. This is because the assets that are transferred to a trust are no longer a part of the property of the settlor. This means that trust assets can never be seized if an individual experiences financial difficulty. Are you wondering how to set up a trust? Hire an experienced lawyer to help you out.

Estate planning

Most people do not wish that their assets are passed directly to their heirs and will in most cases prefer making more complicated arrangements. A trust fund is one of the most flexible and satisfactory ways of making such arrangements. This usually involves offering a source of income and not capital for spouses for life or making provisions for the children’s education without them having access to their assets until when they are grownups. Individuals can also offer a fund that protects family members in the event of sudden illness or any other serious calamities.

Tax planning

Assets that are transferred into trust funds are not considered to be part of an individual’s property. Therefore, income and any capital gains that are generated by these assets are usually taxed based on the rules that govern the trustee who is the legal owner. Inheritance tax will be eliminated since the trustee will be in existence even after the death of the settlor. A well-structured and perfectly administered trust will always lead to significant tax savings.

Confidentiality

Individuals who wish to keep the details of their assets private and confidential should consider setting up a trust. This is one of the legal ways of asset transfer that will save estate duty and keep your trust fund assets confidential. This is unlike a will, where the tax authorities will require a list of all properties and assets owned by the deceased to assess the estate duty payable before the property is transferred to the executors and then distributed to legal heirs as per the will.

Preserve family assets

One reason for setting up a trust fund is to preserve or increase family assets. With a trust, individuals can ensure that the wealth they have accumulated over the years is not divided amongst the heirs but is instead retained as a single fund that accumulates further. Provisions can be made for payments to family members whenever the need arises while other assets are preserved for future generations.

There are various types of assets that can be held in a trust fund including land, property, investments, cash, and valuable assets such as paintings, furniture, or jewelry. This means that trusts can be set up by all kinds of people with the assistance of a Chino Hills estate lawyer. With a trust fund, you will enjoy more control and flexibility when compared to a will, especially in complicated family situations or setups.