Although family trusts would technically transfer your assets to your trustees, it essentially protects what you own through the generations even when you’re no longer around. As the settlor of the trust itself, you still have considerable control over the assets you entrust to your trustee as they will administer it on your behalf.
But what exactly is the benefit of ‘protecting’ your assets through the generations to come?
Protecting Assets from Claims
Most families get a family trust to secure the education of their children, but this barely scratches the surface of what the trust itself can do. One of its main functions is to protect assets, such as property or investments, from claims and creditors after either of the settlors passes away.
A family trust administrator usually steps in after this occurs, and would ensure that the trust itself is upheld and successfully transfers to the trustee. It’s also one of the ways to ensure that your children actually keep the inheritance you secure for them and not to their partners.
Family trusts aren’t always post-mortem cases, though; a family trust can also be used to protect your assets, such as your home or other properties, from a potential business failure.
Avoiding Unwanted Claims
Another benefit of securing a family trust is to protect everything you own from any unwanted claims. Your estate encompasses everything you may own from properties to investments. Unfortunately, problems may arise after you’ve passed on, such as from a previous partner who wants to make a claim on your estate.
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With a family trust in place, you establish the security of everything you own and ensure that the trustee is the one who has the right to keep your assets and estate. As you retain a degree of control over your assets even after it’s already been transferred to the trustee, you also get the peace of mind that your children, for example, won’t spend their inheritance unwisely.
You don’t necessarily have to be on your death bed to start planning for the future of your children and their inheritance. As early as now, you can already secure their future and protect your estate through generations to come.