How Trusts Protect Your Family Across Generations
Family is an integral part of everyone’s lives. However, the importance of familial relationships is often understated or underappreciated. One of the beauties of aging is gaining a perspective that highlights what matters most to us.
Wealth takes many forms throughout life. It’s not just the accumulation of property or resources but the wisdom and experiences gathered along the journey. True wealth encompasses both the tangible and intangible.
The ability to pass on your wealth is invaluable to your family’s future. While the process can feel overwhelming, experienced estate planning attorneys can guide you through every step, ensuring your assets and legacy are preserved.
What Is a Trust?
A trust is a powerful tool for protecting your family’s wealth and legacy across generations. It ensures that assets are managed and distributed according to your wishes, safeguarding them from mismanagement, creditors, divorces, and disputes.
Below are a few key terms to help you fully understand the function of a trust:
- Grantor: A grantor is the person(s) who creates the trust. They transfer their assets into the trust, establish the conditions, and appoint a trustee to manage it. They are responsible for deciding how and when their assets will be distributed and to whom.
- Trustee: A Trustee is the person(s) who are appointed to manage the trust. The trustee is primarily responsible for managing the trust’s assets, communicating with the other trustees and beneficiaries, and maintaining records.
- Beneficiaries: Beneficiaries are the recipients of the financial or property distributions outlined by the grantor in the trust.
Trusts offer a secure, flexible way to protect and nurture your family’s future for generations.
The Benefits of Trusts
Creating a trust has many advantages, including offering a range of financial, legal, and personal protections for you and your family.
Revocable trusts
When you place assets into a trust, legal ownership of the assets is transferred to the trust itself, which the trustee manages. Depending on the type of trust, you may no longer be considered the legal owner of the assets. In a revocable trust, you retain control over the trust and its assets, and you can modify or revoke the trust during your lifetime. However, because you still have control, the assets are considered part of your estate for tax and creditor purposes.
Irrevocable trusts
In an irrevocable trust, legal ownership is fully transferred to the trust, and you relinquish control over the assets. As a result, the assets are no longer part of your estate and are generally protected from creditors and estate taxes. However, you no longer have direct control over the property, as the trustee manages the assets according to the terms of the trust. Along with increased protections, trusts also offer other protections and benefits.
Control over distribution
You also have control over how your money and assets are distributed. Every family situation is different, and each beneficiary may need alternative treatments. Various types of trusts are available for distribution.
- Special Needs Trust: Sometimes referred to as a Supplemental Needs Trust, this type of estate planning allows assets to be distributed so that those with disabilities can remain eligible for government assistance while still having access to personal assets.
- Spendthrift trusts: These trusts are designed to protect assets from misuse by the beneficiary. The beneficiary does not have direct access to the trust's main assets; instead, a trustee manages the assets and controls distributions to the beneficiary according to the terms of the trust.
Avoiding probate court
Probate court is a specialized court that oversees the administration of a deceased person's estate, ensuring that their assets are distributed according to their Will or the state statute if a person dies without a Will.
A trust can help you avoid this process entirely by caring for these designations before they are needed. It also helps maintain your privacy, as probate court requires public disclosure of personal information for proper administration.
Preserving Your Legacy
Establishing a trust is one of the most impactful ways to secure your family’s future. Through careful estate planning, you can ensure that the wealth you have worked hard to build is protected and transferred according to your wishes. Whether it's property, investments, or other assets, a trust provides a structured way to preserve your legacy for generations to come.
By setting up a trust, you not only safeguard your assets from mismanagement and disputes, but you also provide long-term financial security for your loved ones. Thoughtful estate planning creates a lasting foundation for your family’s continued success and stability.
Estate Planning Attorneys in Fort Collins
Protecting your wealth today ensures those closest to you will benefit from your hard work and foresight tomorrow.
Schedule a consultation with Keele & Parke to explore trust options for your family's future security. With years of estate planning experience in the Fort Collins area, you can count on us to protect and preserve your assets.