When it comes to matters such as assets, it pays to get it right from the start.
There is more to family trust than what initially meets the eye. Trusts are capable of protecting the ownership of your assets while you are still alive. With its help, you can transfer the legal ownership of assets while you enjoy the benefits.
For example, if your family home is in a trust, you do not personally own the home but you can still live in it because it is in the deed.
The People Involved in the Fund
There are three major characters involved in every trust fund:
- Settlor: the individual who creates the trust
- Trustees: these are the people involved in managing the trust. Settlors can also be the trustees.
- Beneficiaries: the people who benefit from the trust
Often, there is more than one trustee and there may also be one settlor in the trust. Settlors also have the power to remove or appoint trustees. This is an important privilege that you can also transfer to other people written in your will.
What’s Involved in Your Trust?
Do you know what your trusts should have?
First, decide which things you own should be in the trust and what their value is. In most cases, this involves valuable items such as the family homes, bank deposits, shares, cash and artwork. The ownership of said assets are transferrable to the trust, which results in the trust owing a debt back to you (gifting).
A family trust administration provider will set up a document called a ‘trust deed’ to formally set the trust. This will appoint the beneficiaries, the settlor and the trustees involved, as well as the various rules of the trust.
Why You Should Have a Family Trust Fund
Most people set up trust funds to benefit from assets they no longer personally own. Family trust funds are actually useful in protecting selected assets against creditors and claims. It also sets aside some money for emergency or other special reasons. In addition, trust funds ensure that your children keep their inheritances.
Starting up your fund now may seem like a difficult task. But the rewards from doing so are endless and will benefit you and those around you.