Do you think that trusts are only for elite and wealthy individuals? It’s a common misunderstanding. In fact, many people use a trust for a wide variety of reasons. After reading this synopsis, you may be eager to look for help with wills and trusts Mission Viejo CA.
What is a Trust?
In reality, there is no mystery here. Trusts are legal documents documenting how personal or corporate property or assets are held by a third party, such as a bank or trust company, for the benefit of one or more other persons. Property and assets placed into the trust are owned by the trust itself. As stated in the trust, these assets and properties are dispersed to the beneficiaries under the rules incorporated in the trust document. These rules are set up during the creation of the trust, but they may be amended as time goes on.
Why Set Up a Trust?
People set up trusts for a wide variety of reasons. Some are created to reduce current income taxes, avoid future estate taxes, and shelter assets intergenerationally through the family tree. Other trusts are created to provide a means for charitable donations. Some folks in business create trusts so that they can effectively plan for business succession.
Perhaps one of the most common reasons is to manage and control spending and investments so that the beneficiaries (often one’s children or grandchildren) are insulated from poor judgment and wealth dissipation. In most cases, trusts enable the property held within them to avoid probate upon the passing of the trustees.
Do You Need To Be Wealthy To Create a Trust?
There is no personal financial threshold you have to meet in order to create or benefit from a trust. Because a trust is a legal document, it will be necessary to work with an estate planning attorney to maximize the benefit of the trust.