How to Use Trusts as a Part of Your Wealth Management Plan

An Insight into How Trusts Prove to be an Important Part of Wealth Management Strategy

Trusts as part of wealth management, are a great way of leaving your legacy, protect assets and at the same time avoid the expenditure that is to be incurred on probate. As you must be aware of, probate is the technique that is utilized for estate administration after the death of any individual and helps in the delegation of that individual's assets and estate. 
Moreover, the probate process is usually quite expensive as well as time-consuming but, by setting up a trust you will be able to easily avoid these problems. 
In the following sections let us go through details of how you can utilize a trust for the maximum benefit and accomplish your wealth management goals.

Using Trusts for Wealth Management

What could be added to a trust?

wealth managementThis is the first question that is likely to come up in your mind when you are thinking about creating a trust. The good thing about trusts is that you can include anything you want in a trust ranging from life insurance and real estate settlements to investments and cash.
Additionally, trusts also vary according to their scope, size, and benefits, meaning you can create any type of trust you want depending on your requirements. It is also possible to set up a trust which utilizes specific exemptions like a trust for assets that are jointly owned and provide survivorship rights. 
Moreover, you can create trusts which can be used for division of assets (such as annuities, retirement accounts, etc.) to designated beneficiaries.

What is the role of a trustee?

The trustee is someone whom you (as grantor) appoint to take charge of managing the estate. Additionally, the trustee is someone who has to perform fiduciary responsibility of managing trust assets in a very responsible manner.

How does a trust help in avoiding probate fees?

The main reason a trust is used as part of wealth management strategy is that it helps in avoiding probate fees. As for instance, beneficiaries can be added in a trust for receiving income out of your existing investment and bank accounts. 
All they will have to do is make use of specific forms for the same as the transfer of death and the payable on death forms. All beneficiary has to do is provide an ID proof and death certificate for accessing the funds.

What are the main advantages of creating a trust?

There are several benefits of creating a trust. Let us look at the details here.
Protection: Trusts are a great way of protecting assets from probate fees and lawsuits.
Taxes: Different trusts provide separate tax protections. As for instance, life insurance trust is able to provide protection from estate taxes for death benefits that beneficiary would receive.
Flexibility: Trusts can be used in any way you like, as for example, set aside funds specifically for medical support or dictate when funds are to be distributed.
It is clear that if you are looking for a wealth management vehicle then trusts are the best option to look into.

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