Why do you need a trust?

On Behalf of | Mar 5, 2020 | Estate Planning |

You may wonder why some people have a trust, and whether you should have a trust. There are lots of different kinds of trust. There could be a trust that is created through a will, a family trust that is created before you are even born, and there can be husband and wife trusts. There are all kinds of different trusts that have different acronyms associated with those that trust professionals use regularly. 

According to Forbes, one of the main reasons why you may need a trust is to save money on taxes. There are various types of taxes on transfers of property, including, but not limited to the estate tax. You may want to protect the transfer of your property upon your death by including that property in a trust. There are other types of taxes that you can avoid by using different types of trusts. 

The next major reason for creating a trust is to control the use of the property. Property that is included and owned by a trust can have conditions upon its use, and that will give you the peace of mind that this particular asset, long after you are gone, will be maintained or treated in a certain way. 

The next reason for creating a trust is to protect property. There is a clause called a spendthrift clause that can protect assets of a trust, which can include cash and investments, from the reach of creditors. There may be someone in the family who is an incapacitated person or a person with limited capacity in that they have some type of physical or mental condition that prevents them from being able to exercise their own judgment on their own behalf. They could have a different kind of problem in that they are not responsible with money. A trust can then put conditions on when and how these people get money doled out to them.