Perhaps you’ve heard friends talking about a “legacy trust” or a “family trust ” or a “bloodline trust.” These are all names for the same basic concept. You may be at a point in your life that you feel that you do not need to retain the ownership of all of your assets because you feel that you really “have enough.” You feel that you want to leave a family legacy that might even be there for the grandchildren. So you wonder what is the best way to do this.
An outright gift transfer of assets will certainly provide a nice benefit for your children. Some people bypass their children and make transfers that are expressly just for the grandchildren. You can fund their education, help the grandchild with that first new car or their first home. Either way, when transferring assets to children with the hope that the assets will be preserved and will grow for future family needs, though, you might consider the idea of protecting the assets against hazardous circumstances that could arise. These same principles apply when you are designing your Last Will and Testament.
The beauty of a trust for the family is that the assets can be protected. If enough safeguards are build into the trust structure, trust assets can be protected against creditors (“spendthrift”), they don’t get intermingled with the child’s own assets, and they may remain “off the table” in case of divorce or lawsuits. Also, the assets can be excluded from the child’s own estate at death. The family trust preserves assets for the family’s future while protecting against these all-too-common hazards.
There are many variations of trusts, and no one trust will be exactly right for everyone. They need to be customized for the particular family’s needs. And trusts can be built into your Last Will and Testament as well. The main idea is that sometimes, your goals of family protection might be better served with a trust than with an outright transfer, and you can explore these issues with your attorney.
Call us about senior estate planning and family legacy protection planning … 732-382-6070.