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estate planning 91024

If You Don’t Trust Your Kids with Money, You Need a Trust

Estate Planning Blog, Trusts

estate planning 91024While most parents have the best intentions when it comes to teaching their children about handling finances wisely, sometimes the lessons don’t take. In addition to concerns about spendthrift behavior, some children experience substance abuse or have mental issues that make giving them access to wealth a problem. This is where a trust can be a parent’s best friend.

Trusts allow you to put controls on the distribution of your wealth. For example, you could elect to make partial distributions at predetermined ages throughout a child’s life, or select a trustee who will make the decisions on regular intervals of asset distribution. A trustee may also be a good choice to manage the assets and make investment decisions that are better suited for those with the professional capacity to do so.

Trusts can also protect your heirs from a future divorce or creditors. In the case of a special needs child, a trust can be set up to provide supplemental financial support that doesn’t disqualify them for important government benefits.

One of the most commonly used trusts is a revocable living trust, where you transfer assets into a trust that you control while you are still living.

After your death, those assets pass to your heirs outside of probate (an unnecessary, expensive and totally public court process). This helps your heirs avoid the hassle and cost of going to Court and doesn’t tie up the assets, which are generally frozen during the probate process unless protected by a trust.

Setting up a trust happens in three, equally important phases. First, the trust must be drafted to meet your family’s unique needs and achieve your specific goals. Then, your assets MUST be retitled in the name of the trust. And finally, since trust laws are changing all the time (not to mention your assets, financial holdings, and family situation) it is necessary to review your trust regularly to ensure it remains up to date, continuing to protect your assets and your family for the rest of your life.

And just like the proverbial stool, unless all three phases of a trust are handled correctly, it will fail. Unlike many estate attorneys who only focus on the first phase of trust planning, I lead my clients through all three phases so they can ensure a legacy of love and financial security for their families, no matter what.

If you would like help planning for the safe, successful transfer of wealth to your family’s next generation, call me.

All the best to you and your family,
Signature - Marc

August 12, 2014/0 Comments/by CaliLaw
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