If you work hard throughout your lifetime, save frugally, and invest wisely, you undoubtedly want the assets you manage to accrue as a result to benefit your family, both over the course of your lifetime and when you are gone. Unfortunately, there are numerous ways in which that simple hope could go unfulfilled – particularly if you fail to plan ahead. Simply gifting your heard-earned assets to family members comes with its own set of potential obstacles and problems. The Vero Beach living trust lawyers often suggest using a living trust to keep assets in the family and protect them from a wide variety of potential threats.
Why Can’t I Just Gift Assets to My Family in My Will?
As you likely know, one way to pass down assets to family members or loved ones is by making gifts in your Last Will and Testament. There are several problems with using this method that could result in leaving your assets at risk. When you make a gift in your Will, you relinquish all control over the assets gifted once the gift is complete. If the beneficiary is married, and later gets a divorce, those assets could be lost to the spouse in the divorce. Likewise, if the beneficiary has financial problems, or is simply bad with money, creditors could have a claim to those assets. Finally, the beneficiary might develop an addiction problem, or just be a spendthrift, which will result in the loss of the assets in very short order. For all of these reasons, gifting your heard-earned assets in your Will is often not the best way to ensure that they remain in the family.
How Can a Living Trust Help?
A better option for many people is to create a living trust. Using a trust can resolve many, if not all, of the problems you face when gifting assets in your Will. A trust allows you to retain a certain degree of control over your assets, even after you are gone. You might, for example, create trust terms that only disburse trust assets to your children in relatively small increments over the course of a child’s lifetime. That prevents the possibility of a beneficiary losing all the assets at once. You can even include trust terms that require the assets to be used for specific purposes. You may also decide to hold some of the assets back and designate those assets for grandchildren or even great-grandchildren.
Another reason to use a trust is that the assets held in the trust are legally trust assets until they are distributed to a beneficiary. As such, they remain outside of the reach of a spouse in the event of a divorce or a creditor if the beneficiary has debts.
With a living trust, you also have the ability to make use of the Trustee appointed by you. The Trustee, not the beneficiaries, is responsible for managing the trust assets and growing those assets. The right Trustee can increase the value of the assets you transfer into the trust. If you provide the Trustee with discretionary powers, the Trustee can also decide when a beneficiary is truly in need of assets and how much to distribute if you are no longer around.
As you can see, using a living trust to distribute the assets you acquire over the course of your lifetime may be the best way for you to keep those assets in the family. Be sure to consult with your Vero Beach estate planning attorney to find out if a living trust is right for your estate plan.
Contact Vero Beach Living Trust Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the use of a living trust to keep your assets in the family, or if you want to get started on your living trust agreement, contact the experienced Vero Beach living trust attorneys at Kulas & Crawford by calling (772) 398-0720 to schedule an appointment.