Family Trusts ExplainedOne type of trust fund you can consider if you are thinking about creating a trust fund is a family trust. This type of trust fund is designed to hold all of a families assets in one central place that is easily managed. A family business can also be included in a family trust. Often someone decides to establish a family trust for tax purposes because they are able to experience huge tax benefits. Another common reason to use a family trust is to protect assets. If an asset is held in a family trust then it is not able to be seized to satisfy a debt, and additionally cannot be used in a bankruptcy or similar procedure often. While exact laws on protection of assets vary based upon jurisdiction typically, there is a greater level of protection available. You should always consult with your attorney to determine exactly how safe your assets will be, as well as what can still attach to the assets.
A family trust is able to be created by anyone in the family, as long as the family trust will benefit the entire family. This means that parents or children can create the trust. Additionally, a grandparent could create a family trust. A family trust is often able to protect assets of one person who has filed bankruptcy in the family as long as their assets are included in the family trust. You should also consider that a family trust provides an automatic process for passing down property as future generations are born, and as older generations pass away. This helps reduce the need for a will, which can greatly reduce the probate fees associated with death. Because a family trust does not have a will, it is generally impossible to challenge a family trust as well which can also reduce the amount of time a will is in probate. Because the majority of the assets of the family are included in the trust it reduces immensely the amount of property that can be included in the will. As you can imagine a family trust is not the perfect solution for everyone, there are some families that are not suited for a family trust. These families include those who are unable to share property, or even agree upon how property should be handled or managed. If there is a continuous battle in a family about who is in charge then a family trust may not be the appropriate solution. However, there are several benefits, which make them very attractive under the right circumstances. Talk to your family as well as your lawyer to determine whether it is an appropriate option for you to consider for your family. |