A toolbox is not complete without at least one pair of pliers. Pliers come in all sizes. Pliers are versatile tools that can be useful in a variety of situations and do many things. The same holds true for a flexible legal arrangement known as a trust.
Like pliers, trusts are multipurpose tools that can accomplish various goals. They can benefit individuals, organizations, or safeguard assets. With a trust, you transfer assets to a trustee's care. The trustee will manage your assets as you have instructed. There are a number of reasons for establishing a trust.
Finding time to manage your assets can be difficult. Then there is always the risk of disability as you grow older. You may not be comfortable leaving substantial assets to beneficiaries who are young or inexperienced.
For these reasons, you may want to establish a trust. A trust can ensure that your assets are managed in ways that will preserve them for you and your family.
A divorce or lawsuit could reduce your children's inheritance. Placing assets in trust for your child instead of giving them outright may be a sound way to protect the assets. The trust could include spendthrift provisions preventing your child from assigning their interest to creditors.
Giving To Charity
A charitable remainder trust can offer several benefits, including immediate federal tax deductions and a stream of income for life. At the end of the trust's term, remaining assets pass to charity. Another type of charitable trust is a charitable lead trust. It pays income to charity and returns the trust's assets to beneficiaries when the trust ends.
If you are caring for a child who has special needs, you may be able to set up a trust to provide assistance without jeopardizing government benefits. The trustee will execute the terms of the trust and ensure needs are met. The assets placed in a trust are used to benefit your beneficiary; even after you are gone.