A trust fund is used to hold assets you want to preserve for specific people. You can even establish a trust for an organization. Most people use trust funds to pass wealth on to their children because they can safeguard the assets and ensure they are used for specific purposes. In this blog, we explain how to use a trust to protect your children.
What Are the Benefits of Setting Up a Trust Fund?
The greatest benefits of establishing a trust for your children is knowing that the funds will be available for your children. Another benefit is that assets held in trust are protected from legal claims. Other than retirement savings, any assets you own are subject to seizure by courts and creditors. But if you place your assets in a trust, they will be legally protected.
This will be crucial if you have targeted savings or investment accounts for your children and you end up having to file for bankruptcy or you are found liable in a civil lawsuit. If you put your children’s assets in a trust, the funds will be protected and it will be there when they need it.
What Is an Irrevocable Trust?
If you want to absolutely make sure your assets are protected, you need to establish an irrevocable trust. This type of trust sets out specific, binding terms. Once the irrevocable trust is created, the terms are permanent and cannot be changed, even if you are the one funding the trust. Although you give up a certain amount of control with this type of trust, the assets will be completely protected. You can also use a revocable trust if you want to have control over the trust. However, creditors and other parties will be able to seize the assets if they successfully sue you.
Do you have more questions about estate planning? Then call (571) 777-1000 to schedule a consultation with an experienced estate planning lawyer today. We serve clients throughout Leesburg and the surrounding areas.