Why setting up a Trust may make sense to you even though you are not celebrities

A Trust enable your heirs to avoid probate and gain faster access to the inheritance. Besides it can act as a tools to manage your finances while alive and after the demise.

One should consider setting up a Trust on top of their Will. Yet many people have misconception that Trust is only meant for the rich.

Trust can be set up as revocable or irrevocable. Revocable trust means you can changed the instruction and assets in a flexible manner. Irrevocable trust is less flexible, once the assets transferred to the trust, it cannot be changed or revoked back to the owner. In terms of sense of control, both enjoys absolute sense of control.

Trust also designed to meet certain needs : a special needs trust, for example, to help a disabled person for life, or a family trust aims to provide continuous income to a family member during their lifetime.

Other reasons to create a trust include avoiding spendthrift beneficiary, misused of funds, set up trust funds for grandchildren and protect old-age parents. If you have a complex relationships and complex property ownership, a trust is what you may need to consider too.

If you have a family structure that goes beyond traditional type, for example, there are 2nd or 3rd marriages, have children out of wedlock, long term relationships without formal marriage, setting up a trust may be beneficial to you and your loved ones.

In a trust, you can plan how your young children going to receive their inheritance. You can instruct the trustee to pay income to your child until whatever age you set before they can access to the principal. Otherwise, they would received a lump sum inheritance as young as age 18. This might not be beneficial to the child if they do not know how to manage the funds properly. For example, you can set up a Trust that upon death, your child are entitled to get their allowance monthly. Provide them a financial kick start when they intend to start a business or marriage. The more they earn, the more they will benefit from the trust, and at the age of 45, they could have the balance.

For spouse and parents, a trust can help to create a steady flow of income for them during their lifetime. Besides, you may reduce the possibility of your spouse or parents being kick out of your house due to unforeseen circumstances.

Trust can also set up to help to finance ourselves when we not fit to do it ourselves. For example in the event of disability, dementia or Alzheimer’s disease. By having a trust ahead, once these unforeseen circumstances kicks in, the trustee are bound to take care of their current finances.

Some might think that having a joint account with spouse or children is good enough. But how to assure the money in joint account is use to pay for your current finances ? Or does your family have the time to manage your finances while emotionally stress over the sudden disability ?

Trust is not only meant for the rich. It is a proven financial tools to preserve your wealth the way you want it to be. Revisit your estate plan to ensure you have a well structured plan to meet different needs.

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