In the early times, setting up a trust fund is deemed to be appropriate only for the wealthy who wish to secure their huge and unexplainable assets. Today, it is considered as a perfect vehicle to secure the future of one’s family and properties. It comes with other benefits which can also affect other people and organizations.
This kind of fund may contain a combination of bonds, cash, stocks and other financial mediums. This includes three key elements or persons – the grantor or door, the trustee or team of trustees and the beneficiary. The grantor or donor provides the initial asset or fund. The grantor or donor is actually the one who decides on setting up a trust fund including all its specifics. The trustee administers the distribution of the fund or money following certain conditions. Lastly, the beneficiary is the one who benefits from the fund itself. The beneficiary could be a person, a group of people or an organization.
Generally, this fund has two categories – the living and the testamentary. While they function is similar terms, they just differ in the manner by which they are set up. The living type is obviously created while the grantor is alive. It can be dissolved anytime by the grantor. The testamentary type is created in a will. This cannot be dissolved by anyone or the grantor himself as he is already dead.
There are certain laws on how to set up a trust fund. However, the laws on one area may not be the same to those in another area. This implies that the role of a lawyer in the creation of a trust is very important. Besides a lawyer, some grantors also hire a financial advisor to set everything right from the beginning. Should you choose to have a living trust, keep in mind that as a grantor you must transfer all your assets before you die. Failure to do so will make the trust void. The probate laws will give the government the authority to dispose all the assets contained in it appropriately unless a clause in it states that your last will carries a relevant statement to it.
As previously mentioned, this kind of fund provides many advantages. Properties are kept private and safe from the eyes of creditors through this fund. Therefore, the grantor can protect his wealth from being forcefully taken by creditors, the government or other people. More so, the taxes which need to be paid are decreased in amount as well. Next, the grantor can assure a good life for the minor children he would leave behind after his death. This means that the cash and properties contained in the fund could cover for the educational and daily living expenses of the minor beneficiaries.
Setting up a trust fund could be disadvantageous too. Problems arise when there are disagreements among and between the grantor, beneficiary and trustee. For one, the grantor uses the fund without informing the beneficiary and trustee. In some instances, an unreliable trustee mismanages the fund. If you want to know more about trusts, continue reading here.
This kind of fund may contain a combination of bonds, cash, stocks and other financial mediums. This includes three key elements or persons – the grantor or door, the trustee or team of trustees and the beneficiary. The grantor or donor provides the initial asset or fund. The grantor or donor is actually the one who decides on setting up a trust fund including all its specifics. The trustee administers the distribution of the fund or money following certain conditions. Lastly, the beneficiary is the one who benefits from the fund itself. The beneficiary could be a person, a group of people or an organization.
Generally, this fund has two categories – the living and the testamentary. While they function is similar terms, they just differ in the manner by which they are set up. The living type is obviously created while the grantor is alive. It can be dissolved anytime by the grantor. The testamentary type is created in a will. This cannot be dissolved by anyone or the grantor himself as he is already dead.
There are certain laws on how to set up a trust fund. However, the laws on one area may not be the same to those in another area. This implies that the role of a lawyer in the creation of a trust is very important. Besides a lawyer, some grantors also hire a financial advisor to set everything right from the beginning. Should you choose to have a living trust, keep in mind that as a grantor you must transfer all your assets before you die. Failure to do so will make the trust void. The probate laws will give the government the authority to dispose all the assets contained in it appropriately unless a clause in it states that your last will carries a relevant statement to it.
As previously mentioned, this kind of fund provides many advantages. Properties are kept private and safe from the eyes of creditors through this fund. Therefore, the grantor can protect his wealth from being forcefully taken by creditors, the government or other people. More so, the taxes which need to be paid are decreased in amount as well. Next, the grantor can assure a good life for the minor children he would leave behind after his death. This means that the cash and properties contained in the fund could cover for the educational and daily living expenses of the minor beneficiaries.
Setting up a trust fund could be disadvantageous too. Problems arise when there are disagreements among and between the grantor, beneficiary and trustee. For one, the grantor uses the fund without informing the beneficiary and trustee. In some instances, an unreliable trustee mismanages the fund. If you want to know more about trusts, continue reading here.