Trust funds. Information on trust funds.
Think fast. What's the first thing that comes to mind when hearing the term "trust funds?" If the answer was "something that the people on the nicer side of town leave behind when they die," then it's time to read about the basics of trust funds. Trust funds, in fact, are not only a tool for the wealthy, but should be seriously considered for anyone who has any type of asset and/or wants to assure some type of security for family members.
Trust funds are established, by a person called the "grantor", as accounts that are designated for a certain person or group of people known as the beneficiaries. Trust funds are overseen by a manager called a trustee. Two kinds of trust funds exist: one in the event of the grantor's death (testamentary) and one that can be implemented if the grantor becomes incapacitated (living trust).
Both types of trust funds can be useful, especially if there are minor children or corporate interests involved. With money specifically set aside for the care of the beneficiary, there is a sense of security that may not come if left up to those left behind, or even worse, a probate court.
Of course, another advantages to trust funds is that the government can not take as much out in taxes. Why? The IRS can claim high estate taxes on items or monies left in accounts in the grantor's name. But, with trust funds, the assets are in the name of the beneficiary, so they are not subject to these taxes. In other words, trust funds lessen the financial burden of the beneficiary not only because of the actual money in the account, but with less of an obligation to the IRS.
If you have any type of money saved (be it through investments or just by socking the money away in a regular savings account), it is probably worthwhile to speak to financial consultant to get the details on how trust funds can best help you and your family in case the unthinkable may happen.
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