Understanding Trust Funds
Do you know what a Trust Fund is? If not, you are not alone. Many think of a Trust Fund as a tool accessible only for the rich. It serves as a complex financial tool to protect their wealth. Yes, Trust Funds can be useful for wealth preservation, but the truth is, everyone can create a Trust Fund.
The Trust and the Trust Fund
For a Trust Fund to work, a Trust is first created. The Trust allows a person’s wealth to flow, even after they have passed away. One out of many benefits is that it allows a person to transfer ownership over their assets into a Trust. This means that such asset can avoid going through the exhausting and expensive probate process.
Trusts can own any of your assets including real property, vehicles, jewelry, and bank accounts. When the Grantor’s death, the assets in the Trust will distributed to the beneficiaries. The Trust must have a bank account, this is also known as a “Trust Fund”. Trust Funds is an ongoing distribution of funds, or by an outright distribution of funds from a Trust. The distribution to whom and how much is decided by the Grantor upon creating the Trust.
Who Benefits from a Trust Fund
Trust Funds can benefit a variety of groups. These groups may include minor children, family members, friends, charities, companies, and more!
Trusts are complex that cater to the unique situations of each beneficiary. For instance, the Grantor may not want to distribute a money to their minor children. Another is when a family member may be less reliable with their personal finances. The Grantor has the authority to avoid stressful situations with the help of an experienced estate planning attorney.
Creating a Trust provides so many benefits. But, the Grantor must have a good understanding of their personal situation with correct guidance. This is why it’s imperative to be prepared and to work with an experienced attorney. To learn more about how a Trust Fund can benefit you, please schedule a consultation with our firm so you can start planning for your future!