What’s a Trust? And How do I Start my Plan?
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Last month, we talked about why you need an estate plan. No matter how much or how little money you have, an estate plan will help make sure your wishes are followed and that your family is taken care of.
An estate plan can have several pieces – a will, a power of attorney, an advanced directive – and one of the most important parts is a trust. Let’s talk a little bit about it.
What is a trust?
There are several different types of trusts, but basically, a trust is a legal arrangement that helps you manage and protect your money or property, both while you’re alive and after you’re gone. Think of it like creating a container where you put your valuable things, like money, a house, or other assets. You decide the rules for what happens to those things and who gets to benefit from them.
Here’s how it works:
- You create the trust. You decide how it works, including what goes into it and who will benefit from it. You’re called the grantor.
- You choose a trustee. This is the person or organization responsible for managing the trust and following your instructions. You can even name yourself as the trustee while you’re alive, and choose someone else to take over if you can’t manage it anymore or after you pass away.
- You decide on beneficiaries. These are the people or organizations who will receive the money or property in the trust, either right away or in the future.
Why use a trust?
- Control: You can set rules, like “Give my child a certain amount each year until they’re 25.”
- Avoid probate: A trust can help your family skip the lengthy and costly court process after you pass away.
- Privacy: Trusts aren’t public records, so your finances and plans stay private.
- Protection: A trust can protect your assets from things like taxes, lawsuits, or poor financial decisions by beneficiaries.
For example, if you have young kids, you might use a trust to make sure they inherit your money only when they’re old enough to handle it. Or, if you own a home, you can put it in a trust to make sure it goes directly to your family without delays.
It’s like making a plan for your property and choosing someone you trust to carry it out.
But how do you start an estate plan? And what do you need to consider?
Here are some videos that can help you start asking the right questions.
“End of Life” Legal and Financial Considerations
If you realize that a fatal accident or illness can end your life at any time, and you don’t want to leave your family unprepared, watch this video to learn how important it is to provide instructions and make provisions for the “End of Life”. https://financialsecurity.video/8f0dAF4cpcH
Avoid Probate with a Living Trust
Even if we have a will at the time of our passing, all of our assets and liabilities will need to be settled in probate court before they can be distributed to our families. Watch this short video to learn how your estate can easily avoid the delay and cost of probate for your family. https://financialsecurity.video/8f0gVWqDmYF
Leaving Tax Free Assets to Your Family
There are 6 Ways to Create Tax Free Bequests in Your Estate Plan . . . watch this short video to which ones are best for your family. https://financialsecurity.video/8f0JckQxvfO
Tax Free Discount on Your Estate Tax Liability
If you have or will have an estate tax liability . . . watch this short video to learn how you avoid IRS seizure and liquidation of your assets, while paying the minimum estate tax with a tax free discounted settlement. https://financialsecurity.video/8f0d0zFpN0W
This is…a LOT
Estate planning can be really complicated, and scary. And I am not an expert. Lucky for me (and you!), I have a whole team of experts that are here to help you start your plan, and help future generations hold your family’s wealth. If you need help with planning your estate, get in touch! I’m happy to help you in any way I can.
Also – I’ve recently become a member of SOFA – The Society for Financial Awareness. Their mission is to end financial illiteracy across America, one community at a time. Through SOFA, I will be providing free financial educational presentations. If there’s a finance topic that you’d like more information about, reach out and let me know!
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