What is a trust and is it right for me?

What is a trust?

A trust is a legal entity that is created for the purpose of transferring property to a trustee for the benefit of a third person (beneficiary). The trustee manages the property for the beneficiary according to the terms specified in the trust document.

Is a trust right for me?

If you find yourself considering the need to establish a trust, you may ask yourself: “Is this the right move for me?” It’s a fair question, and one that deserves careful consideration. To help in your decision-making process, here are five compelling reasons why a trust might be the right choice for you.

First, a trust provides a way to secure your assets and ensure they are distributed according to your wishes. You’ve worked hard to accumulate your wealth, and you want to make sure that it’s protected and used as you intend. A trust can provide a legal framework for this, and offer peace of mind knowing your assets are in good hands.

Second, a trust can help you avoid the probate process altogether, which can save time and money for your loved ones and beneficiaries. When you create a trust, you transfer ownership of your assets to the trust, which means those assets are no longer considered part of your estate. This means when you pass away, the assets in the trust can pass directly to your beneficiaries, without going through probate.

Third, a trust can offer tax benefits that can help you minimize your tax liabilities. By setting up a trust, you can transfer assets out of your estate, which may reduce your estate tax burden. Additionally, income generated by the trust can be taxed at a lower rate than your personal income tax rate, which can lead to significant savings over time.

Fourth, a trust can be used to plan for injury or to care for loved ones with special needs. If you become unable to manage your affairs, a trust can provide a structure for someone you trust to manage your assets on your behalf. If you have a loved one with special needs, you can use a trust to ensure their ongoing care and support, without jeopardizing their eligibility for government benefits.

Fifth, establishing a trust can also provide a powerful means of giving back to your community, in a way that aligns with your values and priorities. If you’re passionate about supporting education, healthcare, the arts, or other causes, a trust can offer a flexible and effective way to make a positive, long-lasting impact.

Whether you want to avoid probate, protect your assets, take care of loved ones, save on taxes, or give back to the community, a trust might be right for you. Talk with a trusted Park advisor to see if it’s a good fit for your needs. By working with a qualified financial advisor, you can explore the various types of trusts and determine which one makes the most sense for your unique circumstances.