6 Things A Trust Can Do That You May Not Re­al­ize

ForbesWeekly - - NEWS - BY MARK EGHRARI, FORBES CON­TRIB­U­TOR FOL­LOW MARK EGHRARI AT www.forbes.com/sites/markeghrari

To many peo­ple, a trust seems like a ba­sic (al­beit highly ef­fec­tive) es­tate plan­ning tool. The maker of the trust trans­fers own­er­ship of cer­tain as­sets to the trust, and a trustee man­ages those as­sets for the ben­e­fi­ciary or that trust.

But your trust can do a lot more than that.

1. A trust can pro­tect your ben­e­fi­cia­ries.

A trust can pro­vide ben­e­fi­cia­ries pro­tec­tion from law­suits, cred­i­tors or di­vorce. Es­tab­lish­ing an ir­rev­o­ca­ble trust means a fu­ture cred­i­tor or claimant can­not sat­isfy a judg­ment against the as­sets held in that trust. A trust can also pro­tect the in­ter­ests of a mi­nor child by set­ting guide­lines for when dis­tri­bu­tions are made.

2. A trust can pro­vide for chil­dren with spe­cial needs.

A trust can not only pro­vide for the health care and per­sonal needs of a child with spe­cial needs, it can also help en­sure el­i­gi­bil­ity for Medi­care ben­e­fits is main­tained. And if you are con­cerned that a ben­e­fi­ciary is un­able to man­age as­sets wisely, an in­de­pen­dent trustee can help make smart de­ci­sions on his or her be­half.

3. A trust can en­cour­age cer­tain ac­tions or val­ues.

A trust can pro­vide in­cen­tives to achieve cer­tain goals: Ed­u­ca­tion, pro­fes­sion, home own­er­ship, com­mu­nity ser­vice… what­ever you de­cide. That can make a trust a pow­er­ful tool in pass­ing on your val­ues and ethics.

4. A trust can pre­serve fam­ily wealth.

With­out care­ful plan­ning, cir­cum­stances like di­vorce and re­mar­riage can re­sult in as­sets in­tended to re­main in the fam­ily ac­tu­ally leav­ing the fam­ily. A well-crafted trust can en­sure your es­tate is pre­served for grand­chil­dren and even great grand-chil­dren.

5. A trust can take care of pets.

Who will take care of your pets when you’re gone? (Es­pe­cially if your pet is a par­rot with a life­span of ap­prox­i­mately 100 years?) A trust can not only spec­ify who will take care of your furry friends, it can also pro­vide the re­sources to en­sure they are cared for prop­erly. And there’s one more thing a trust can do.

6. The most im­por­tant thing you can pass on is fam­ily har­mony,

but that can be dif­fi­cult if you do not com­mu­ni­cate your in­ten­tions—and the rea­sons be­hind those in­ten­tions—be­fore you pass away. Let­ting your heirs know what you de­cided avoids mis­un­der­stand­ings and gives you the op­por­tu­nity to ex­plain in per­son, rather than leav­ing your loved ones won­der­ing.

Trusts are ex­tremely flex­i­ble and can cover a wide range of goals and needs. One size never fits all, so make sure your trust pro­vides for your loved ones based on your spe­cific goals... and their unique needs.

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