Are Trusts Just for The Wealthy?

Are Trusts Just for The Wealthy?There is incorrect notion worldwide about who needs a trust and whether trusts are just for the wealthy folks. For people with modest means, they believe there is no reason to have one. However, it’s important noting that, a trust is an essential tool of any estate plan and is meant for every adult. Many people believe assurancesare made so as to avoid taxes. It’s a misconception and people need to understand that although they are essential for tax planning, to the individuals who want more control over their property and to determine when and how their assets and property will be distributed to their beneficiaries, it’s a very useful tool.

Making a trust does not cost a lotand. Therefore, one does not have to be scared thinking it’s an expensive process. Having a trust in place helps avoid numerous situations which might occur when there is no written trust. For example, when a person wants to leave some of his assets or money to his grandchildren or his young children, he might not feel comfortable doing so and hence will assign someone to be in control until they are mature enough to handle the property by themselves.

Trusts are not for the famous and the rich as a majority of society tends to think, but it’s a legal tool that allows one to transfer whatever they have to their family members and their loved ones. The beneficiaries, therefore, do notundergo any delay, hassle or expense of having to go to court to demand what is rightfully theirs. With a trust, the costs to your estate arereduced, and there is proper distribution of your property to the right heirs or the charity. A trust also enables your assets to pass outside of probate which is the legal process that governs and administers the estates and thereby helping avoid the probate court costs.

A living trust can also help one to manage his/ her financial affairs when they are not able to do so in their old age, or due to illness or any other incapacitation. Some contributing factors that make people think that trusts are only meant for the wealthy are:

  • Lack of awareness- Many people are madeto believe that without much wealth, there is no need for a trust since there is nothing to protect. However, it’s now clear that a trust is meant for each and every adult and especially parents who have children, so as to protect them from any wrangles that may erupt if they die without indicating what property should go to which child.
  • Denial- Despite the fact that everyone has some assets in his/ her name, only a few believe what they have is enough to guarantee to draft a trust document.
  • Confusion- some people don’t understand what a trust is all about. A greater percentage of the wealthy people also, do not have a trust yet.

So it’s essential for anyone to start thinking of a trust, whether you are rich or not, especially if you currently don’t have one.

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