Many parents elect to establish a revocable trust for the benefit of their minor children. This provides a sense of security for them to know that if something happened and they were not able to raise their children, that they have guidelines in place for how the assets of their estate should be used to benefit their children. Establishing a trust for this scenario allows parents to make their wishes known about such things as the standard of living and the type of education they want for their children, timing of distributions from the trust to their children and the amount of each distribution.
Special Needs Child
Trusts play a particularly important role for those parents who have children or grandchildren with special needs. A trust can address the problem of ensuring such child is able to continue to qualify for governmental assistance or to qualify in the future, should they need to. For a person qualifying for governmental assistance, inheriting a substantial amount of money can be detrimental to such assistance and support.
Privacy and Asset Protection
A trust can own a person’s assets during their lifetime, which effectively keeps those assets out of their name individually and in the name of the trustee of their trust. This is common in real estate ownership, as well as business owners and individuals working in fields with the potential for personal liability. Holding assets in the name of a trust makes the assets less susceptible to liability exposure because they are not readily identified as personal assets. Depending on the type of trust used, creditors may not be able to access your assets. Incorporating a trust and funding it during one’s lifetime and/or on death, also provides for the transfer of wealth without the need for probate court administration. This can allow for a more efficient transfer of assets and maintains privacy upon a person’s death.
Contact the attorneys at Thomas Law Group to learn more about the different types of trusts and whether creation of a trust is right for you or your family.