You have worked so hard to build your family a fortune enough to provide even for generations to come. However, you are concerned that everything will go down the drain once you are gone. In such a case, what are your options?
The best solution lies in incorporating an irrevocable trust in your estate plans and putting all or some of your estate assets in it. This can protect your family’s wealth in several ways, as outlined below.
Through the transfer of ownership
When you create a trust and properly channel assets into it, their legal ownership changes. The assets no longer belong to you or other individuals but to the trust, which is considered a legal entity.
Therefore, these assets cannot be sold off to third parties by the beneficiaries, nor can they be repossessed by creditors or auctioned in a bid to recover debts owed. The assets are also not up for division during a divorce.
It gives you control over the management of the family wealth
You may not be around to oversee or manage the family fortune, but a trust will ensure that you still retain some sort of control. The terms and conditions of a trust are binding and will guide how proceeds from assets in it will be distributed for years to come.
In addition, it’s not easy to change the terms of a trust once it is established. Therefore, your family wealth will be managed as you envisioned.
Setting up the right trust
Depending on your end objectives, there are various types of irrevocable trusts that you can use to preserve your family’s wealth. Learning more about how trusts work and what you need to do when setting up one will help you make the most out of these useful estate planning tools.