Creating wealth that runs through several generations is one of life’s greatest achievements and only a handful of people manage to pull this feat. Passing these assets to beneficiaries is often a tricky process that needs people to tread carefully, explains a family trust lawyer. A trust is a great option to safeguard your wealth as you pass it to your heirs.
A trust helps avoid probate, which enables beneficiaries to access their inheritance quicker. For the best results, you need to bear a few crucial factors in mind.
Don’t appoint your best friend as trustee
While your bosom buddy might be ready and willing to manage the trust, in most cases, they are just over their heads. Managing a trust puts you on a collision course with the beneficiaries. For the large part, beneficiaries feel entitled to the properties or funds in their trust and won’t stand for anything less.
This single-minded pursuit for instantaneous gratification makes managing such a trust a nightmare. In most cases, it creates needless court battles that the only service to foster the animosity. To avoid such complications, appoint a professional to run and manage the trust. Such experts have the necessary skills and knowledge to keep matters under wraps.
Do fund the trust
Many people often forget that creating a fund is just the first and in fact, the most basic. What comes next is the most crucial and as result, most difficult. You need to transfer some of your property and funds into the trust. Otherwise, they’re just dead in the water.
If unsure how to go about it, have your legal counsel advise you on the various options available. Typically, trusts fall into two broad categories — revocable and irrevocable trust. Within these categories, you can customize a trust to suit your specific needs and situations.
While creating a trust offers you a great leeway in avoiding taxes, you can run into some problems. Just be sure to appoint a capable person to run it and pick one that suits your specific needs.