Seven reasons you may need to register a Family Trust
Avoiding estate duty and administration costs.
If you fund your trust during your lifetime, you will avoid estate duties. Avoiding estate duty and administration costs means your family will not have to go through the lengthy and costly process to access your assets` after your death. This saves time, heartache and money.
Planning for incapacity.
Another benefit to funding your trust while you are alive is that your co-trustee can access the assets for your benefit if you become incapacitated. If you are in the ICU or a long-term care facility, who will pay your bills and manage your assets? If your trust is funded, the co-trustee can do that. Otherwise, your family may have to go to court to have a curator bonis appointed to oversee your assets.
Limiting children’s access to their inheritance.
If you have minor or irresponsible children, you want to make sure their inheritance is overseen by a trustee until they are old enough to manage the monies themselves.
Protecting beneficiaries from themselves.
If a beneficiary has a drug addiction, is a spendthrift or just makes poor financial choices, having a trustee limits their access to the trust funds.
If a beneficiary goes through a divorce, a trust could prevent their divorcing spouse from obtaining all or a portion of their monies in a settlement.
Creditor and business risk protection.
If a beneficiary is in a business or a profession that makes her susceptible to business risk or litigation, having a family trust can protect the assets and keep them out of reach of creditors. Clients with children who are professionals often keep the child’s inheritance in trust to protect from any such judgments.
Preventing bad decisions by a surviving spouse.
What if your surviving spouse spends the money on unnecessary items leaving your children with nothing? Trusts can mitigate and possibly prevent such a scenario.